Preparing your business for sale

Most owners think the price is settled in the negotiation. It is settled well before that, in how quickly a buyer can convince themselves the profit continues after you leave.

Start with the numbers a buyer can verify

Three years of consistent, comparable financial statements is the baseline. Consistent matters more than impressive: a buyer who finds the same item treated three different ways across three years starts checking everything.

Then separate the business from the owner. Personal expenses run through the company, a director salary set for tax rather than for the role, rent paid to a property you own, family members on payroll beyond the value of their work. Each of these needs identifying and quantifying, because a buyer will do it anyway and would rather you had done it first.

Reduce what depends on you

Ask a blunt question: if you stopped answering the phone tomorrow, what breaks in the first three months? Whatever the answer is, that is the work.

In practice it usually means handing your customer relationships to named people and letting them hold for a full cycle, promoting or hiring someone with real authority below you, and writing down what only you know. Pricing logic, supplier terms, the reason the process works the way it does.

This is the single highest-return item on the list. A business that runs without its owner is not just worth a higher multiple, it is saleable to a much wider set of buyers.

Fix the paperwork before anyone asks

Customer and supplier contracts in writing. The tenancy documented, with the remaining term and any assignment clause understood. Licences current. ACRA filings, the register of members and the register of controllers up to date, and any past share transfers properly stamped.

None of this adds value on its own. All of it costs value when it is missing, because it turns a six-month process into a nine-month one and hands the buyer a reason to re-price.

Deal with the concentration you can control

One customer at 40 percent of revenue is a structural discount. You will not fix it in a quarter, but you can move it over eighteen months, and the trend itself is worth showing.

Know what you want afterwards

Buyers test this early. An owner who is not clear about why they are selling, or what they want to do next, reads as someone who may withdraw at signing. That uncertainty gets priced too.

What this is worth

Moving from the bottom to the top of a three to five times range on a million dollars of earnings is a two million dollar difference. Very few owners can add that much through a year of trading. Almost all of them can add it through preparation.