Preparing a company for sale is not a marketing exercise. It is the work of making your performance easy for a stranger to verify, and your future easy for that stranger to imagine without you in the building. Very little of it can be done quickly, which is why owners who do this well tend to begin two or three years before they intend to sign anything.
Why timing decides more than effort?
There is an uncomfortable asymmetry at the heart of every sale. You are selling the future, but a buyer will only pay for the past, because the past is the part that can be verified. Anything you improve therefore has to survive long enough to appear in reported results before it counts for anything at all.
This is why the calendar matters more than the intensity of the effort. A general manager hired four months before a process opens is a line of cost on a profit and loss statement. The same person, two years in and running the business while you take a holiday, is the most persuasive evidence you can offer. Nothing about the hire has changed. Only the amount of history behind it.
The sale itself is comparatively quick, six to ten months from engagement to closing. The preparation is what takes years, and it is the part owners consistently underestimate. There is also a second reason to start early that has nothing to do with selling: cleaner reporting, better contracts and a deeper management team make a business more valuable to own. Do the work, then decide to keep the company for another decade, and you have lost nothing.
Numbers a stranger can trust
Buyers do not begin with your story. They begin with your books, and what they are testing is not whether the business is profitable but whether the reported profit is real, repeatable, and reconcilable to something outside your own spreadsheet.
The accounting profession recognises four levels of service on financial statements, rising from preparation through compilation and review to a full audit. Most companies of this size sit near the bottom of that ladder, which is not disqualifying. It simply moves the work later, into due diligence, where an accounting firm the buyer hires rebuilds your numbers at your cost in time and credibility.
Four habits do more for you than any label on the cover page: accrual accounting applied the same way every year, a monthly close you can finish inside two weeks, a chart of accounts that keeps your personal life out of your business lines, and a balance sheet whose accounts have actually been reconciled. Buyers read the profit and loss statement to understand the business. They read the balance sheet to find out what the profit and loss statement is not telling them.
Adjusted EBITDA deserves its own warning. Adding back costs a new owner would never inherit is legitimate, and the obvious candidates hold up well: a salary above what the role is worth, rent paid above market to a building you happen to own, a single legal settlement. What does not hold up is the expense described as one-off that appears in all three years. The temptation to stretch is expensive twice over. You lose the adjustment, and you lose the buyer’s confidence in every other number you have presented.
The question underneath every other question
Strip away the detail and a buyer is asking one thing. If you leave, does this still work?
Almost every value driver is a version of that question. Customer concentration matters not because a large account is dangerous in itself, but because of who holds the relationship and on what terms. A customer worth 35% of revenue, MELIORA ADVISORY Insights
under a five-year contract, served by a team that customer knows well, is a more comfortable proposition than a customer worth 20% who rebids the work every January and has only ever spoken to you.
Revenue predictability is the same question in another form. Contracted revenue with a defined term can be forecast. Revenue that returns out of habit can only be assumed. Revenue won job by job has to be argued for, and the argument requires evidence: backlog with award dates, win rates by bid type, gross margin by job.
The sharpest version of the question is simply this. If you were unreachable for ninety days, what would stop? For most founder-led businesses the honest answer includes the customer relationships that live in your phone, the pricing judgment that exists nowhere in writing, and the supplier terms you negotiated on the strength of a friendship. Each has a remedy, and every remedy takes months rather than weeks.
Buyers will meet your management team, and that meeting is a test with an obvious way to fail it. If you answer every question, you have proved the thing you were trying to disprove.
What surfaces late, and why it costs you
Deals in this market are rarely killed outright by something found in the files. They are slowed by it, and delay is where negotiating leverage quietly drains away.
The recurring offenders are unglamorous. Contracts never signed, or expired and never renewed. Clauses requiring consent before a contract can be transferred, which can force you to telephone your largest customer for permission at the least convenient moment imaginable. Leases with related parties on terms nobody wrote down. Sales tax uncollected in states where you have customers but no premises. Long-serving people paid as contractors who look, to anyone applying the tests, a great deal like employees.
Working capital belongs in the same category, because it is where a good headline price quietly loses money. Most transactions set a normalised level of working capital that must be delivered at closing, and arriving below it reduces the price almost dollar for dollar. Squeezing receivables in the final months therefore achieves nothing: it either lowers the target itself or reappears as a shortfall afterwards. Improve collections and hold that improvement for two years, though, and the cash stays with you.
Where to begin
If you have three years, start with what needs history behind it: customer diversification, a management layer with genuine tenure, a margin story that holds across cycles. If you have one, be honest about it. Fix the accounting, assemble the documents, quantify the exposures, and leave the structural work alone. A clean company with one acknowledged weakness sells far more easily than a company visibly halfway through fixing everything at once.
Thinking about selling your business?
Most of what determines the outcome is settled long before a buyer ever sees your company. If you would like an outside read on where yours stands, and on what is worth fixing first, we are glad to have that conversation.