Selling your business isn’t something you wake up one day and decide to do. It’s a process—one that requires careful planning, strong financial preparation, and the right timing. The question most owners ask is: When should I start preparing? The short answer is sooner than you think. Exit planning isn’t just about the transaction—it’s about maximizing value, protecting your legacy, and ensuring the transition is as smooth as possible. Here’s a practical timeline to guide you.
3–5 Years Before Selling: Lay the Foundation
The earlier you start, the more control you’ll have over the outcome. At this stage, you should:
- Get a valuation. Know where you stand today and identify gaps in value.
- Clean up financials. Eliminate personal expenses from the books and ensure consistent, accurate reporting.
- Address risks. Resolve legal, tax, or compliance issues before buyers ever see them.
- Strengthen operations. Build systems and processes that don’t rely solely on you. Buyers pay more for businesses that can run independently.
This is also the time to align with financial advisors on your personal wealth strategy so the proceeds from a future sale meet your retirement or reinvestment goals.
1–2 Years Before Selling: Optimize Performance
Once the foundation is set, shift focus to polishing the business for maximum appeal.
- Boost profitability. Trim unnecessary expenses, diversify revenue streams, and demonstrate growth trends.
- Document processes. Create clear SOPs (standard operating procedures) so a buyer sees stability.
- Lock in key relationships. Secure contracts with customers, suppliers, or employees that protect recurring revenue.
- Reduce owner dependency. Transition leadership duties where possible. A business tied too closely to the owner is harder to sell.
Think of this as staging your home before putting it on the market—buyers pay more when they see a clean, turnkey operation.
6–12 Months Before Selling: Assemble Your Team
This is the window where active preparation begins.
- Hire a broker or advisor. Choose someone with proven experience in your industry.
- Engage your CPA and attorney. You’ll need both to ensure tax efficiency and smooth contracts.
- Prepare marketing materials. Confidential business summaries, buyer packages, and financial reports should be polished and ready.
- Develop your exit story. Buyers will want to know why you’re selling. A compelling narrative reassures them and supports valuation.
During the Sale: Execute and Protect
Once the business is on the market, timing and discipline matter.
- Screen buyers carefully. Focus only on qualified prospects with the means and motivation to close.
- Protect confidentiality. NDAs and controlled information releases are essential.
- Stay engaged. Don’t let performance slip. Buyers will walk away if numbers dip during negotiations.
- Lean on your broker. Negotiations will hit roadblocks; your broker’s job is to keep the deal alive and moving.
Start Early, Sell Smart
Exit planning isn’t an event—it’s a process that should begin years in advance. By laying the groundwork early, optimizing performance, and working with the right professionals, you’ll not only increase the value of your business but also ensure a smoother, less stressful transition.
Thinking about your exit? Don’t wait until it’s too late. Contact Ohio Business Brokers today to start planning the right way.