How to Prepare to Sell Your Business in 24 Months

Optimize financials, operations, and documentation to maximize your business sale value over the next 24 months.

1. Clean up your financials and establish EBITDA baseline. Separate personal expenses from business books immediately. Install proper accounting systems if you're still using spreadsheets. Calculate trailing twelve-month EBITDA and establish this as your baseline for improvement. Buyers pay multiples of clean, auditable EBITDA—not revenue.
2. Document all systems and reduce owner dependency. Create standard operating procedures for every repeatable process. Train employees to handle tasks you currently do personally. Build management depth by promoting or hiring operations managers. Buyers discount businesses where the owner is irreplaceable by 20-40%.
3. Optimize operations for consistent cash flow growth. Focus on growing EBITDA by 15-25% annually through margin improvement and revenue growth. Cut unprofitable product lines or customers. Negotiate longer-term contracts with key customers to show recurring revenue. Consistent growth commands higher multiples than volatile performance.
4. Prepare comprehensive due diligence materials. Compile 3 years of financial statements, tax returns, and management reports. Document all contracts, leases, intellectual property, and key employee agreements. Create a confidential information memorandum highlighting growth drivers and competitive advantages. Incomplete documentation kills deals or reduces offers by 10-20%.
5. Engage advisors and establish realistic valuation expectations. Interview business brokers or investment bankers 6 months before listing. Get preliminary valuations from 2-3 sources to establish a realistic price range. Factor in advisor fees of 6-12% for brokers or 3-8% for investment bankers depending on deal size.