Selling your business is a major milestone, and preparing methodically can dramatically increase its
value and attractiveness to buyers. Most business brokers we’ve talked to tell us the many businesses are
either un-sellable or “train-wrecks” behind the scenes. And consider 3-year time horizon.
Given how much you want for your business and how soon you want to sell it, this list is actually quite reasonable
and do-able. Here’s a comprehensive 3-year checklist sorted by phase to guide your journey from decision to deal:
Year 1: Foundation & Optimization (Prepare for Exit)
Financial Clean-Up & Growth Strategy
These can be accomplished and maintained within your accounting system:
1. Audit historical financials (past 3–5 years).
2. Convert financials to accrual accounting if needed.
3. Normalize expenses (remove personal/non-operational costs).
4. Document all revenue streams.
5. Improve gross margins and EBITDA.
6. Implement scalable financial controls.
7. Project future growth (3–5 years).
8. We recommend these financial models.
Business Valuation
A certified business broker can provide a “broker’s opinion of value:”
1. Get a preliminary business valuation.
2. Identify key value drivers (recurring revenue, IP, brand, etc.)
3. Benchmark against industry P/E and EV/Revenue multiples.
Strategic Planning
1. Refine business model and operations using a tool like BizPlanBuilder®
2. Identify customer concentration risks.
3. Diversify revenue and strengthen recurring income.
4. Systematize marketing and sales efforts.
Year 2: Documentation & Operational Maturity (De-Risk & Prove Value)
Documentation & Legal Readiness
1. Ensure clean corporate structure.
2. Review and update contracts (clients, vendors, employees).
3. Create or update your employee policies handbook.
4. Create or update your Safety Procedures.
5. Review intellectual property (trademarks, patents, domains.
6. Ensure data security & privacy compliance.
Operational Improvements
1. Automate and document SOPs across all departments.
2. Reduce reliance on the owner/founder.
3. Improve team performance and retention plans.
4. Prepare detailed organizational chart and key roles.
Financial & KPI Reporting
1. Implement real-time KPI dashboards (revenue, churn, CAC, LTV).
2. Track monthly/quarterly progress against forecasts.
3. Increase customer lifetime value (LTV) and reduce churn.
Year 3: Marketing the Business & Closing the Deal
Buyer Readiness Package
1. Prepare a professional pitch deck and CIM (Confidential Info Memo).
2. Finalize 3-year financial forecast.
3. Include detailed customer segments and buyer personas.
4. Highlight product roadmap and competitive advantages.
Engage Advisors
1. Choose a broker or M&A advisor.
2. Retain an M&A attorney and tax specialist.
3. Prepare data room for due diligence.
Go to Market
1. Identify and screen potential buyers (strategic, PE, individual).
2. Conduct confidential outreach or use a marketplace.
3. Negotiate LOI (Letter of Intent) terms.
Due Diligence & Closing
1. Prepare for buyer Q&A (legal, financial, ops, tech).
2. Finalize APA (Asset Purchase Agreement) or SPA (Stock Purchase Agreement).
3. Transition plan for employees and customers.
4. Close the deal and transfer funds.
Post-Sale
1. Train new owner/transition team.
2. Communicate changes to staff and clients.
3. Handle tax planning and wealth management.
4. Celebrate responsibly!
