Eighty percent of a business’s exit value is determined before the listing ever goes live. The transaction itself — marketing, diligence, closing — is the last mile of a process that begins, at minimum, 18 months earlier.
Months 18–12: Foundation
- Fix the financials. Reconcile, document, and normalize. If your CPA has to reverse-engineer three years of history, a buyer will discount for the mess even if the truth is clean.
- Cut owner dependence. Delegate revenue: move your top three accounts to a sales manager. Delegate operations: formalize the second-in-command. Price your own hours out of the P&L.
- Review contracts. Renew expiring customer agreements. Redline anything that dies with the owner (personal guarantees, “services of the owner” language). Buyers underwrite contract runway.
Months 12–6: Polish
- Deferred maintenance. A buyer’s inspection finds what you ignored. $20,000 of fixtures and paint routinely adds six figures to the offer conversation — presentation is underwriting.
- Customer concentration. No action you can take adds more value than reducing your top customer’s share of revenue toward 15%.
- Clean the balance sheet. Resolve intercompany loans, owner vehicles, and casual accounting. A business that closes with clean statements is a business that commands full price.
Months 6–0: The Process
- Valuation. A defined, defensible range — not a wild target.
- Marketing. A teaser released only to qualified, screened buyers.
- Diligence. Organized, complete, run like a professional closing — because that’s exactly what it is.
The owners who leave the most on the table are not the ones who priced high — they are the ones who started late. An 18-month runway isn’t a luxury; it’s the standard for a premium exit.
