Many business owners think about selling their company as a distant event—something for “one day.” But when life happens, “one day” can quickly become “today.”
A few years ago, a business owner called me eager to sell – a new opportunity had come up, and he needed to exit quickly. Once we began the process—valuing the business, gathering financials, and preparing for market—we ran into a major roadblock: his accounting firm hadn’t maintained accurate records. Without reliable financials, we couldn’t properly value the business nor get it financed.
It took more than two years to clean up the books. During that time, he became an absentee owner, stepping away from daily operations. Revenue declined, market share shrank, and by the time we finally sold, his company had lost nearly $500,000 in enterprise value.
Although we successfully sold the business, with more preparation, the outcome could have been better for the owner.
The Value of Being Ready
If you own a business, you have probably gotten calls, letters and emails from buyers trying to entice you to sell. In fact, my team regularly contacts business owners on behalf of my buy-side clients. If you are not thinking about selling anytime soon, you might not give the emails much thought; but offers for well-run businesses can be very competitive and maybe one gets your attention and you start to consider changing your timeline to sell.
Case in point – a few weeks ago, at a social event, I spoke with a business owner who had agreed to meet with a private equity firm that had been pursuing him for months. Originally he planned to wait to sell until after his school-age son was grown, yet here he was, about to sit at the negotiating table.
I offered a few suggestions on how to handle the initial face to face meeting. I told him that at the very least, he needed to have a current assessment of his company’s value as well as an understanding of the buyer’s strategy and intent in order to leverage different scenarios to secure the best price and terms.
A couple of days after the meeting, he called me—unsure how to respond to an Indication of Interest. He asked me to do a complete valuation of his business and for my help to not only negotiate the highest price, but also to arrange a deal structure that would align with his goals and needs. His experience is an example of how fast opportunities to sell can come about and why it’s important to have a plan.
Running Your Business While Preparing for a Sale
Selling your business isn’t just about doing a transaction —it’s about positioning your business as a low-risk, high-reward investment to maximize your enterprise value. Whether you plan to sell in a year or five, the smartest moves are made well before sitting at the closing table.
To maximize value and attract the right buyers, focus on three key areas:
Financial Readiness – Keep clean books and regularly review valuation drivers to ensure you’re prepared when the time comes. Buyers and their bankers will scrutinize every adjustment, so documenting and justifying add-backs upfront is essential to maximize your valuation.
Operational Independence – Build strong systems, delegate responsibilities, and develop a capable leadership team. These steps not only make life easier while you own the business but it also makes it significantly more valuable when you’re ready to sell. A business that runs smoothly without the owner’s daily involvement is far more attractive to buyers.
Market Positioning – Understand your market, track industry trends, and stay ahead of competitors. Capitalizing on geographic expansion, product innovation, or untapped customer segments, will not only build your business but it will also give buyers confidence in its long-term success.
Strengthening these areas ensures your business is not only sellable but positioned to command the best possible price with your terms when the time comes.
The businesses that command the highest prices are the ones that are prepared to sell. We work with business owners sometimes years before they’re ready to sell, helping them understand their market positioning, financial readiness, and overall saleability. An initial complimentary consultation includes an Indicative Value Range, outlining what different buyer types are most likely to pay based on current trends. Think of it as a readiness report—it gives you insights into your business’s market value, potential buyers, and exit strategies and offers key steps to increase your enterprise value.
Whether you’re looking to sell, scale, or just understand your options, we’re here to help you plan for the best possible outcome—whenever the time is right for you.
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