How do I prepare my business for sale?

Buyers pay for predictable cash flow and low risk, not for potential. Preparing a business for sale means removing the loose ends a buyers accountant and lawyer will find anyway, on your timeline instead of theirs.

Fix the financial statements first

Several years of clean, consistent financial statements are the foundation of any sale. Separate personal expenses run through the business, reconcile the books to the tax returns, and be ready to explain any add-backs to reported earnings. A buyer’s lender will want financials that match what was filed with the CRA, not a set of numbers that only makes sense with an explanation.

Reduce how much the business depends on you

If the business stops running when you take a week off, that is a problem a buyer will price in. Document procedures, delegate customer relationships to staff, and put a manager in place if you do not already have one. Owner dependence is one of the most common reasons deals fall apart in due diligence.

Get contracts and leases in order

Review whether your lease, supplier agreements, franchise agreement, and major customer contracts can be assigned to a new owner, and whether landlords or counterparties need to consent. A lease that expires soon or cannot be assigned will scare off buyers or force a lower price. Fix what you can before you list rather than during negotiations.

Build the due diligence package early

Assemble financial statements, tax returns, corporate records, leases, material contracts, and a list of assets before a buyer asks for them. Having this ready shortens the sale timeline and signals that the business is well run. It also gives you a chance to spot and fix problems, such as a lapsed licence or an unassignable contract, while you still have time.