Most business sales that fall apart do so during financial due diligence. Buyers scrutinize your numbers. The earlier you prepare, the better.
Start early (12-18 months before)
- Clean up the books - buyers want current reconciliations and numbers that match tax returns
- Normalize EBITDA with documented add-backs - owner compensation, one-time costs, personal expenses
- Document everything - 3 years of financials, tax returns, revenue by customer, key contracts
What financial preparation can do
Solid preparation can preserve $200K-$500K in valuation on a $5M-$15M business. It also speeds up the process and reduces the chance of the deal falling apart at the last minute.