Preparing for Sale

Most deals that fall apart do not fall apart over price. They fall apart over the books. Preparing a business for sale means getting your financial records clean enough to survive a buyer's accountant, a lender's underwriter, and formal due diligence, which comes down to reconciling three years of tax returns, internal statements, and bank records so they tell one consistent story. That is the whole game. Get it right and offers come faster. Get it wrong and you watch a serio

Reducing owner dependence means building a company that runs without you, so a buyer is paying for an operation instead of a job. You get there by documenting your systems, handing real authority to a management layer, and stepping out of the daily decisions well before you put the business on the market.

Selling a service business is usually harder, and brings a lower multiple, than selling a product or manufacturing business, because a service company's value lives in people, relationships, and the owner, while a product business comes with equipment, inventory, and other assets a buyer can actually take home.

The documents needed to sell a business fall into four buckets: financial, legal, operational, and marketing/growth. A typical lower-middle-market data room contains 50 to 200 individual files.

A couple of years ago, I sat down with the owner of a veterinary clinic outside Charlotte. She had built a solid practice over 15 years. Three locations, good revenue, loyal clients. She wanted to sell and retire. On paper, it looked like a clean deal. Then we pulled back the curtain. Preparing a business for sale means getting every part of your company, your finances, your operations, your contracts, your team, into a condition where a buyer can step in with confidence and