How to prepare a business for sale in 9 steps


  • Learn the steps required to prepare a business for sale
  • Understand how to prioritize your work on the risks that are hurting value the most
  • Learn how to prioritize what is most important to you for a sale

How to prepare a business for sale in 9 steps

Starting, operating and growing a business is hard work fraught with significant personal and business risk. Growing a business to a stage where it is salable (i.e., there are buyers who would be willing purchasers) is a feat very few business owners achieve. Yet, many business owners who achieve this level of success do not invest the time, energy and resources necessary to properly prepare their company for sale – this will cost them dearly in both deal value and the certainty of their deal actually getting done. In this article, we will equip you with a basic outline of how to better prepare your business for an eventual sale, even if that sale is years away.

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How to prepare to sell your business: what are the different steps required?

Selling a business is much like any other business process. If you start with a well-defined, proven process that has been executed successfully countless times, your odds of success increase dramatically. On the other hand, if you are simply reactive to the first offer that comes in or treat the process in an ad hoc fashion, you will get predictably poor results.

We have worked on over 200 transactions and have seen the good, bad, and ugly when it comes to business sales. We have learned that the very best deals with the highest valuations and the least brain damage come from careful planning and preparation. What is interesting is how many business owners put so much time and attention into sales or operations of their business, but assume a sale of their company will miraculously “happen” without a well-defined process and disciplined preparation.

But what are those steps?

Preparing my business for sale: The 9 steps to craft the most successful sale of your company

1.     Determine your goals and objectives of a sale.

Going down the path to sell your company without a clear vision of exactly what you want to accomplish is a recipe for disappointment and potentially wasted time and money. Spend time either with a financial advisor and/or coach to determine what a sale of your business will make possible that is not possible today. If it is additional financial resources, define how much in financial resources you will need to net (after fees, taxes and deal structure) from a transaction. If there are other qualitative factors (like ensuring an enduring legacy for your business, taking care of your team, or others), list those out and then prioritize them in order of what is most important to you. In any sale, you will likely have to make trade-offs, so understanding what is most important to you will help calibrate your thinking when you are evaluating potential offers. We use a prioritization exercise that we are happy to share with you – just reach out to us.

2.     Get an objective assessment of where your business is today.

Most business owners have only a vague idea of what their business is worth, and most don’t really know the qualitative factors that are driving value up or down for them. Work with a valuation expert or investment bank to get an objective assessment of your business’s worth. You can also use our proprietary application CoPilot to help get a sense for the different risks in your business that might impair valuation or prevent a deal from happening. Again, we are happy to share this with you for free – it is 120 questions and comes with a 30-40 page report – just reach out to us.

3.     Compare your financial goals to the value of your business.

If your business is worth $20 million, but after taxes, fees and deal structure (escrow, earnouts, etc.) would net $12 million, and your financial requirements are $15 million, then you have some work to do. Knowing how your goals compare to your business’s likely net proceeds to you allows you to either enter into the sale process with a high level of confidence, or it will help you understand what more you need to do to get to where you need to be to accomplish your goals.

4.     If there is a mismatch between valuation and your goals.

If the expected net proceeds of a sale are not enough to meet your financial goals, then you will need to develop a plan to get there. We use CoPilot to help us determine next steps, as can you. Or you can work with a business advisor or consultant to help you put a plan in place to get to your goals.

5.     If your expected net proceeds exceed your financial objectives.

If you are fortunate enough that the expected value of your business exceeds your financial goals, then you are ready to begin the sale process in earnest, which is comprised of the following steps.

6.     Hire your team.

We interview every client after their sale is completed to get a sense for what they thought of the process. In almost every case, the common refrain is: “I had no idea how complex and complicated the sale process is – it was overwhelming at times.” For most business owners, they go through the sale process one or two times. Hire competent advisors – a deal attorney (not your general corporate attorney who only does a few deals a year), an accountant to help with financial diligence preparation and tax optimization, a financial advisor who can help you pre-plan to reduce taxes, and an investment bank who can run the overall deal process.

7.     Collect your diligence materials.

On average, our diligence rooms hold over 1,000 documents for each of our clients. These materials include contracts, insurance policies, benefits plans, litigation summaries, prior acquisition documentation, intellectual property documentation, and dozens of other types of documents. You want your diligence preparation to be largely completed prior to going to market so that you are not scrambling to answer document requests from buyers during the middle of the process when you need to make absolutely sure the business continues to perform as expected (nothing kills a deal faster than poor business performance during a deal). This takes time, is a pain in the rear, but must be done to ensure a smooth process. We have a sample due diligence request list in the back of our book Harvest: The Definitive Guide to Selling Your Company, or you can find them online.

8.     Put your story together.

Institutional investors and strategic buyers see over 2,000 deals a year. How do you make your story stand out? You need to tell a compelling story about why it has been successful, and more importantly, why it will continue to grow and be even more successful. Most entrepreneurs have only a vague notion of where future growth is going to come from, but buyers need to see more complete evidence and a detailed growth plan to give them confidence in your plan (and give you credit for this with a higher valuation).

9.     Identify your potential bidders.

In conjunction with your investment bank, you will need to identify both financial and strategic buyers whom you think might be interested in buying your company. We tend to go broad with the lists we put together because we have found that in about half our deals, our ultimate buyer was not from a list of “usual suspects.” In addition, by only going to the “usual suspects” you are likely to get middle of the pack valuations. Outlier valuations come from identifying buyers who want your business for some unique, sometimes surprising reasons, and this only happens when you widen the net you cast.

Once you have your diligence materials prepared, your story crafted, and your buyers identified, then you can have your investment bank start dialing for dollars. This part of the process is tedious and time consuming (for the investment bank, not you), and will take a few weeks to complete. After this reach-out, you will hopefully have multiple parties who want to bid on your business.

If you are considering an eventual sale and would like to get a third party’s view on how you can best position your company, please feel free to reach out to us at

Preparing my business for sale: take the Class VI market readiness assessment

In addition, if you are considering selling your company, make sure to get an objective assessment of your business ahead of time so you are not surprised. Click on the button below to use our CoPilot Assessment on your target company. CoPilot will help you identify what specific risks your business has that decrease company value. CoPilot identifies over 90 different types of potential risks a company could have that will make the business less valuable in the eyes of an investor. Get the test ahead of time and build value today with CoPilot.

Your marketing initiatives will put you in a much more advantageous position when it comes time to sell. And there is a wealth of data to back up the ROI in planning your online marketing strategy to improve your presence. Your prospective buyers will be looking at your online presence. Even if you haven’t been actively marketing online, you likely do have a website providing a footprint on the Internet, and this may include online reviews or other mentions online. If you’re not involved in this process, you’re leaving a lot to chance.

Your website and owned online properties will be a factor in any buyer’s initial assessment of your business. In the same way that it’s a factor in attracting new customers and improving your sales and profits, your online presence speaks to the worth of the company when it comes to valuation. Inbound and outbound marketing initiatives are a long-term strategy. They reap results over time. With solid planning, they also provide great metrics to allow you to project future revenue and other aspects integral to valuation with much more confidence. 


Chris Younger  |  Managing Director  |  Class VI Securities, LLC  |  Class VI Family Office, LLC

Chris co-founded Class VI in 2005 with a mission to Enable the Entrepreneurial Spirit. Sharing a passion for what entrepreneurs mean to our community, Chris and his business partner David Tolson felt they could do a better job for business owners and have had a great time helping clients ever since.

Prior to Class VI, Chris spent more than 20 years gaining experience in executive management, marketing, sales, law, and mergers and acquisitions.

The views expressed represent the opinion of Class VI Partners. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness.  While Class VI Partners believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and the Class VI Partners view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Testimonial may not be representative of the experience of other customers. Testimonials are no guarantee of future performance or success. Testimonials are NOT paid testimonials.

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