What to Do Now to Sell Your Business in a Year

Selling a business is a long journey. Around 82% of businesses are on the market for four to twelve months before selling, with the majority selling between seven and nine months. However, wasting time during the transaction process is often avoidable. Spending a year preparing can seem unnecessary and frustrating, but this work lays the groundwork for a quick, successful sale.

Here are the four things you should be doing now to sell your business in a year.

1. Build a Team

When it’s time to sell your business, it can be tempting to go it alone. But it’s been proven that a team of trusted advisors with transaction experience helps business owners secure higher acquisition premiums when they sell. Before going to market, engage an investment banker or M&A advisor to guide you and your company through the process.

Advisors also suggest strategic and management changes to companies preparing for sale to increase their value. These small changes spruce up a business prior to sale in a predetermined time frame, usually between six months and a year. Because of this, getting an advisor on your side should be the very first step you take when setting the selling process into motion.

2. Fine-tune Financials

The single most important factor to a buyer is the health of a potential purchase’s financials (though cybersecurity is rapidly becoming a close second). A company’s financial statements should always be accurate and well-documented. Gather financials from the past three to five years to review with an accountant.

At the very least, financial reports must be free of inconsistencies and speak to the health of the company, but seasoned buyers are also looking for signs that you monitor financial performance and then make adjustments that can improve profits. If your financials tell the story of a lifestyle business focused on personal compensation and not true growth, you might have a problem.

3. Figure Out Your Value

Before you make any broad changes to increase your company’s valuation, you need a benchmark to work from so you can make accurate predictions about value add. Get knowledgeable about the valuation models buyers use in your industry or category, and learn about valuations of comparable companies in your industry.

4. Think About Your Team

It can be difficult to stop rumblings about a sale once the ball gets rolling. At this early point in the process it’s important to consider how this affects your employees and how you eventually plan on informing them. While’s it’s not necessary to have a clear plan in place this far in advance, start thinking about what information you’ll share, as well as when and how. Over- and under-informing employees can incite panic, so think carefully.

Pre-sale prep can seem daunting and even a little frightening, but the more work you put in before you start the sale process in earnest, the more time you save later.