How to prepare your business for sale
A little preparation can make your business easier to sell and easier for a buyer to trust. Here are plain, practical steps.
1. Start 1 to 3 years ahead
BDC notes that the earlier you start preparing, the better position you'll be in when it's time to sell. Starting early lets you show a few years of steady, clean numbers.
2. Clean up the books
- Have 3 years of financial statements and tax returns ready.
- Separate personal expenses from business expenses, so buyers can see what the business really earns.
- Keep your bookkeeping up to date every month.
3. Make the business run without you
BDC advises making sure the business doesn't rely on your presence to keep going. Write down how things are done day to day, and train a trusted person or team to handle the key jobs.
4. Tidy up leases, contracts and permits
Review your lease, contracts and agreements, and update them if needed. Check whether your lease can be transferred. Make sure licences and permits are current.
5. Fix maintenance and first impressions
Keep equipment in good repair and the premises clean and tidy. Buyers notice. Small fixes can make a big difference to how a business feels on a first visit.
6. Reduce reliance on one customer
If one customer or supplier makes up a large share of your business, buyers may see risk. BDC suggests addressing this, or thinking about how a buyer could manage it.
7. Know your numbers
Understand your yearly profit, and terms buyers use such as SDE (what the business earns for one working owner) and EBITDA. See EBITDA multiple explained and What is my business worth?
8. Gather your documents
Use the printable checklist below to collect everything a buyer will ask for.
9. Talk to an accountant and a lawyer early
Your accountant can help with taxes and whether an asset sale or a share sale suits you. A lawyer can spot legal issues before a buyer does.
Printable checklist: getting ready to sell
- 3 years of financial statements
- 3 years of business tax returns
- Personal expenses separated from business expenses
- Written procedures for daily jobs
- A trained person or team for key tasks
- Lease reviewed, and transfer terms checked
- Key contracts reviewed and up to date
- Licences and permits current
- Equipment list with rough values, and maintenance done
- Premises clean and tidy
- List of top customers and the share of sales each makes up
- Staff list with roles and years of service
- Rough value (try our free estimate)
- Met with your accountant
- Met with your lawyer
or download the full Exit Plan Checklist (PDF).
Common questions
How early should I start preparing?
Ideally 1 to 3 years before you want to sell. That gives you time to show steady results in your books and to train others to run things.
Do I have to fix everything before I list?
No. Buyers know no business is perfect. Focus on the things that most affect trust: clear records, a business that can run without you, and no legal surprises.
Who should I talk to first?
Your accountant and a lawyer who has helped with business sales. BDC suggests building your team of advisors early.
Sources
Ready when you are
Listing is free and takes about 10 minutes. Your details stay private until you choose to share them.