Five Things a Business Owner Should Do Before Selling

Jessica Zavattin- Business Broker

“Selling a business is rarely as simple as finding a buyer and signing a purchase agreement. The owners who walk away with the best outcomes — highest valuation, smoothest closing, fewest surprises — are the ones who start preparing months, sometimes years, before they ever list. Here are five things every business owner should do before putting their company on the market”

1. Get Your Financials in Order:

Buyers and their advisors will scrutinize every number. Clean, consistent financial statements — ideally reviewed or audited, with clear add-backs for owner-specific or one-time expenses — build buyer confidence and support a stronger valuation. Owners who wait until diligence to organize their books often lose leverage, and sometimes lose the deal entirely.

2. Separate Personal and Business Expenses:

It’s common in owner-operated businesses for personal expenses to run through the company. Before going to market, owners should identify and document these clearly. Unexplained or commingled expenses raise red flags for buyers and can undermine trust during negotiations, even when the underlying business is healthy

4. Reduce Owner Dependency:

A business that cannot function without its owner is harder to sell and typically commands a lower multiple. Buyers want to know the business will run without the current owner in the room. Documenting processes, cross-training key staff, and building out a management layer — even a modest one — materially strengthens a business’s appeal and value.

3. Address Legal and Contractual Loose Ends: Outstanding litigation, expired or informal contracts, unresolved lease terms, and unclear ownership of intellectual property can all slow down or derail a sale. A pre-sale legal review — ideally with counsel experienced in M&A — can catch these issues early, when there’s still time to fix them, rather than in the middle of diligence when a buyer’s patience is thin.

5. Understand the Deal Structure Before You Need To:

Owners are often surprised by the mechanics of a sale: earn-outs, vendor take-backs, holdbacks, and working capital adjustments are common, not exceptions. Understanding these structures in advance — and knowing which terms are negotiable — helps owners evaluate offers clearly instead of reacting under pressure.

The takeaway

The businesses that sell for the best price, on the best terms, are almost always the ones that started preparing before they needed to. A business broker, accountant, and lawyer working together early in the process can save an owner significant time, money, and stress down the line.