If you haven’t consciously prepared your business for sale, assume this: There is a lot to do to deliver a clean, controlled, high-value exit.
The reality is often that if you haven’t started exit preparation, you’re probably not ready to exit.
The best exits aren’t reactive. They’re engineered. The question is not “When do you want to sell?” It’s: “When do you want to be ready?” In this article I cover some of the fundamentals you need to look at and I hope this gives some insight into the planning and time recquired to do this.
Stabilise & Strengthen the Foundations
Most SMEs are not sale-ready. They’re owner-reliant, loosely documented, commercially sound but structurally fragile.
Before you even think about buyers, you need to ensure the fundamentals are in place.
Strategy & Positioning
What is the long-term strategic narrative of the business?
Are you a growth story? A consolidation play? A niche specialist?
Why would someone acquire you instead of building it themselves?
How much business is contracted/repeatable?
What doe customers think of you?
Buyers don’t just buy turnover. They buy certaint and sniff out risk.
Leadership Depth & Dependency Risk
If the business revolves around you, it isn’t a transferable asset. You may need to:
Build or strengthen a leadership team
Clarify roles and reporting lines
Develop a second tier of management
Put proper decision-making structures in place
Leadership transitions alone can take 12–24 months to bed in properly.
Contracts & Legal Hygiene
You need to review and have time to change:
Supplier contracts
Customer contracts
Employee contracts
Shareholder agreements
Everything else as well...
Weak documentation leaks value during due diligence.
Financial Quality & Reporting
You need:
Clear management accounts
Clean EBITDA adjustments
Working capital visibility
Consistent reporting discipline
Ability to respond to buyer data requests
Weak financial reporting reduces buyer confidence.
Build Transferrable Value
A buyer will look under the surface of your business and this is where they will look for risk and this is where deal can fall through. Profit does not equate to value. This is about creating certainty and reducing risk.
Reduce Risk Concentration:
Be careful of over-reliance on key factors in your business.
Customer concentration
Supplier dependency
Key person reliance
Key product or service reliance
Buyers will see this as risk.
Strengthen Commercial Resilience
How well is the business run from a commercial perspective?
Pricing Discipline
Margin control
Cost base review
Cashflow stability
Systems and process clarity
Buyers will look at your processes and the 'acumen' of the business.
Retention Planning
Buyers want to feel your key people will stay on at the business:
Incentive schemes
Succession planning
Retention agreements
Management structure
Do you have a solid structure that works when you're not there?
Brand & Culture
Often overlooked, this is about first impressions and culture fit. It can help you identify buyers rather than hope a buyer finds you.
What are the values and culture of the business?
Does the branding etc reflect the business and its' potential?
How you are positioned an perceived in the market will impact on your ability to sell.
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