Key takeaway
Decide what you want to preserve, make results explainable and identify dependencies to reduce. Preparation time is not transaction time.
01
Set your objectives before discussing price
Clarify the role you want to keep, your liquidity needs, control preferences and what you want to preserve: continuity, the team or the business legacy. An internal succession, family transfer and third-party sale require different preparation.
A two- or three-year horizon helps organize the discussion. It is neither a universal preparation period nor evidence that a buyer will be available.
Ref. [3]
02
Explain results and their changes over time
Bring together consistent financial statements and management information. Explain movements in revenue, margins and cash flow instead of presenting only one favourable year. Support assumptions and any proposed normalization.
- Which results recur, and which are exceptional?
- What investment is needed to maintain operations?
- Which information would a buyer want to verify?
03
Identify reliance on the owner, key people or customers
Can the business operate without your daily involvement? Examine who makes decisions, which processes are documented, how customer relationships are managed and how much activity depends on particular people or customers. Measure these dependencies and consider suitable responses rather than hiding them.
04
Assign an owner and measure to each priority
An overly long list is difficult to follow. For each priority, name a responsible person, establish a starting point and choose a progress measure. An action may improve clarity or resilience without automatically increasing business value.
Maintain investments needed for operations. Artificially reducing spending to improve reported results may push necessary work into the future.
Ref. [1]
05
Review the plan with the advisers involved
Agree on a review cadence and revisit options when results, objectives or market conditions change. Clarify valuation work and legal, tax or transaction questions with the appropriate professionals.
Exit Readiness 36 can be a starting engagement. Scope and deliverables are agreed for each mandate; no sale, price or timetable is guaranteed.
Sources consulted
- 1BDC — 7 steps to increase your business’ value before you sell itin English — opens in a new tab
- 2BDC — How to minimize negotiations when selling your businessin English — opens in a new tab
- 3BDO Canada — A complete guide to selling your businessin English — opens in a new tab