How do I get my business ready to sell over twelve months?

BDC says a lot of people underestimate how long it takes to prepare a business for sale, especially if there are issues to address. A year gives you room to find and fix issues before a buyer does, though BDC also calls a proactive, multi-year preparation strategy essential to truly maximize the sale price and simplify negotiation. BDC also says the spread between the initial offer and the final price is often narrower when the seller is well prepared. The split below is a suggested sequence, not a legal requirement, so adjust it to your business and advisors.

Months one to three: goals and advisors

Decide what you want from the sale and who might take over, since BDC says the right buyer may depend partly on your goals. Then assemble your advisors. BDC describes an accountant to prepare financial statements and projections, and a lawyer familiar with business transitions to supply information during due diligence and negotiate the agreement. Ask for a valuation at this stage so you start from a realistic picture.

Months four to eight: records, contracts and risks

BDC lists the work: maintain equipment, keep good records, review contracts and leases, document standard operating procedures, and address supplier or customer concentration. It also says to identify potential legal questions, such as employee or environmental issues. Take each item in turn and note what you finished, since a buyer’s due diligence will test it.

Months nine to eleven: the owner and the team

BDC suggests a timeline for transferring responsibilities and information, and a plan to retain employees, customers and suppliers and communicate with them. Start moving relationships and decisions away from yourself now. Agree with your advisors on when and how you will tell staff.

Month twelve: package it and protect it

• Assemble current and historic financial statements, tax returns and projections.
• Prepare a short, factual summary of the business.
• Decide how interested buyers will be screened and sign confidentiality agreements.
• Confirm who will answer buyer questions, and how fast.
• Plan the closing steps: the CRA says a seller with employees must close the payroll account.

BDC adds that, depending on a site’s confidentiality procedures, word could get out that you are selling. For the final steps, see how to list your business for sale.