Getting Exit-Ready
What owners should do 12-24 months before a transaction.
By Chris Robinson
The best time to prepare a business for sale is usually before the owner feels ready to sell.
That may sound counterintuitive, but it is one of the most important lessons in business transactions. The strongest outcomes are rarely created in the final weeks before a buyer appears. They are built 12 to 24 months earlier through better reporting, cleaner operations, stronger management depth and clearer owner objectives.
A buyer is not only looking at what the business has earned. They are trying to understand how reliable those earnings are, how dependent the business is on the owner, and what happens after completion.
That is why getting exit-ready matters.
The first area to address is financial clarity.
Many owner-operated businesses are profitable, but the numbers are not always presented in a way that helps a buyer quickly understand the true performance of the company. Personal expenses, one-off costs, owner wages, family labour, inconsistent classifications and manual adjustments can all blur the story.
That does not mean the business is weak. It means the buyer has to work harder to understand it. When the buyer has to work harder, perceived risk increases. When perceived risk increases, value often comes down.
A business preparing for sale should build clean monthly management accounts, clear profit and loss reporting, a reliable balance sheet, aged debtors and creditors, normalised EBITDA analysis and a simple explanation of add-backs. The objective is not to manufacture a better story. The objective is to make the real story easier to trust.
The second area is owner dependency.
Many excellent SMEs are still heavily founder-led. The owner may hold key customer relationships, approve pricing, manage staff issues, negotiate suppliers, drive sales and solve operational problems through instinct. That can work very well while the owner is fully involved. It becomes a risk when the owner wants to exit.
The practical solution is to build transferability.
Document key processes. Strengthen second-tier leadership. Move customer knowledge into the CRM or operating system. Make pricing logic visible. Clarify who makes decisions when the owner is not present. Give trusted team members more responsibility before the transaction, not after it.
The goal is not to make the owner irrelevant. The goal is to prove the business can continue to perform when the owner steps back.
The third area is customer and revenue quality.
Buyers will look closely at concentration, repeat business, contract strength, churn, referrals, pricing consistency and gross margin by service line. A business with stable recurring relationships and clear service economics will usually be easier to underwrite than one with lumpy revenue and unclear margin drivers.
Owners should spend time understanding where profit is really generated. Which customers are most valuable? Which services are underpriced? Which jobs are high revenue but low margin? Which relationships are at risk if the owner exits? These questions are not just useful for a sale. They improve the business regardless of whether a transaction happens.
The fourth area is operational discipline.
A buyer wants to know whether the business has a rhythm. Are there regular management meetings? Are KPIs tracked? Is cash forecasted? Are staff roles clear? Are systems documented? Is there a pipeline? Is there a marketing engine? Are compliance obligations controlled?
A business does not need to be perfect. But it does need to show that it is governable.
Finally, the owner needs clarity on what they actually want.
Exit preparation is not only about valuation. It is about outcome design. Does the owner want a full exit, staged exit, retained equity position, advisory role, earn-out, vendor finance or ongoing involvement? Do they care most about price, certainty, staff continuity, family wealth planning, legacy or speed?
The earlier those questions are answered, the stronger the negotiation becomes.
For many owners, the right buyer may not be the one offering the highest headline price. It may be the buyer with the best structure, strongest operating support and clearest plan for the business after completion.
That is why 12 to 24 months matters.
In that window, an owner can materially improve buyer confidence. They can clean the financials, reduce dependency, strengthen the team, improve reporting, address underpricing and shape a better transition. Those actions compound.
A good business deserves a good exit.
But good exits are prepared, not improvised.