Selling a Business: The Level of Preparation Determines the Success of the Sale

6 July 2026

One of the biggest mistakes business owners make is waiting until they’re ready to retire before they begin preparing their company for sale. By then, it’s often too late to correct issues that could significantly impact the value of the business or even prevent it from selling altogether.

The truth is that selling a business begins long before it’s listed on the market. The best transactions are the result of careful planning, thoughtful preparation, and a willingness to view the business through the eyes of a buyer.

If you’ve followed my content, you’ve probably heard me say two things repeatedly:

Make it easy for the buyer to buy.

And…

Approximately 80% of businesses that come to market don’t sell—until the reason they don’t sell is corrected.

Preparation is how you eliminate those reasons.

Start Preparing Earlier Than You Think

Ideally, preparation should begin a year or more before you intend to sell. Larger, more complex businesses may require several years of planning to maximize value.

This preparation isn’t simply about cleaning the office or organizing financial statements. It’s about identifying anything that could create concerns during buyer due diligence and correcting those issues before prospective buyers ever see them.

The more confidence buyers have in your business, the more confident they’ll be in paying your price.

We offer a comprehensive coaching program – both group and 1:1 options – in The Brokers Roundtable℠, our online support platform tailored for business owners, business brokers, Realtors, buyers and anyone else interested in valuing, buying or selling a business.

Consider Pre-Sale Restructuring

One of the first questions to ask is whether every asset currently owned by the business should actually be included in the sale.

Many companies own assets that aren’t essential to the operation of the business, including:

Commercial real estate
Excess land
Vehicles
Investment assets
Equipment no longer used in operations
Other non-core assets

In many cases, these assets can be removed from the business before marketing it for sale.

For example, a business owner may decide to retain ownership of the building and lease it back to the buyer. This provides ongoing rental income while making the acquisition more affordable for the purchaser.

Whenever assets are transferred out of the company, it’s important to obtain independent valuations. Proper documentation helps establish fair market value, supports tax reporting, and avoids disputes later in the transaction.

This type of restructuring should always be completed with guidance from experienced legal and tax professionals.

Prepare for Due Diligence Before Buyers Arrive

Nothing kills momentum in a transaction faster than poor preparation.

Once a buyer signs a Letter of Intent, they’ll begin an extensive due diligence investigation. Their advisors will carefully examine nearly every aspect of your business.

If problems are discovered during due diligence, buyers frequently respond by:

Reducing the purchase price
Demanding additional seller protections
Delaying closing
Walking away entirely

That’s why smart sellers conduct their own due diligence before bringing the business to market.

Think of it as inspecting your own house before listing it for sale.

Get Your Financial House in Order

Your financial records tell the story of your business.

Buyers want financial statements that are accurate, organized, and easy to understand.

One of the most important steps is determining whether reported earnings truly reflect the company’s ongoing profitability.

Family-owned businesses often compensate owners in unusual ways. Some pay below-market salaries while taking larger distributions. Others run personal expenses through the business. While these practices may make sense from a tax perspective, they can distort reported earnings.

Your financial statements should be normalized so buyers clearly understand what the business would earn under normal operating conditions. (See this video on how to determine what your business REALLY makes.)

___________________________________________________________________________________________________

REALTORS! Our course, “Learn How to Value and SUCCESSFULLY Sell Businesses“, teaches you how to value and sell businesses.

Don’t Miss Out on the Coming “Silver Tsunami”!

Make Sure Your Legal Documents Are Complete

Legal issues can derail an otherwise excellent transaction.

Before going to market, confirm that your business has:

Current licenses and permits
Accurate corporate records
Updated organizational documents
Proper shareholder or operating agreements
Employee agreements that comply with current laws
Well-documented customer and supplier contracts
Proper lease agreements for occupied real estate

Check out our video series, “How Much is My Business Worth“ on our YouTube channel.

Many business owners discover missing documents only after buyers begin asking for them.

Finding those problems beforehand allows time to fix them without delaying the sale.

Build a Professional Data Room

Today’s business sales are conducted electronically.

Rather than emailing hundreds of documents back and forth, most professional transactions utilize a secure online data room. A well-organized data room allows buyers and their advisors to review documents efficiently while maintaining confidentiality.

Good data room platforms offer features such as:

Automatic indexing
Document organization
Activity tracking
Watermarking
Permission controls
Redaction of confidential information

Organize documents in the same order buyers typically request them. This makes the due diligence process faster and demonstrates that the business is professionally managed.

Think About Your Employees

Selling a business often requires management to invest significant time responding to buyer requests while continuing daily operations.

Key employees may be asked to prepare reports, locate documents, answer questions, or assist with the transition. Some businesses choose to reward these employees through retention bonuses or transaction incentives.

The timing and structure of these incentives matter, however, so consult experienced tax and legal advisors before implementing any compensation plan.

Equally important is maintaining confidentiality throughout the sale process. Premature disclosure can create unnecessary uncertainty among employees, customers, and vendors.

Make Sure Ownership Issues Are Resolved

Many privately held companies have multiple shareholders.

Before marketing the business, verify that every owner understands the sale process and is willing to participate.

Questions worth addressing include:

What percentage does each owner hold?
Does everyone agree on selling?
Are there buy-sell agreements that govern the process?
Are there drag-along or other shareholder provisions that may apply?
Will some owners remain with the company after closing while others leave?

Resolving these issues early prevents disagreements during negotiations.

Build the Right Advisory Team

Selling a business is often the most significant financial event in most owners’ lives. As such, it’s imperative that you surround yourself with professionals who regularly handle business sales.

Depending on the transaction, your advisory team may include:

An experienced business broker or M&A advisor
A CPA or tax advisor
An attorney experienced in business acquisitions
Valuation professionals
Financial planners

Each advisor brings a different perspective to the transaction.

Your broker markets the business and negotiates with buyers. Your accountant helps explain financial performance and tax consequences. Your attorney protects your legal interests and coordinates the documentation necessary to close the transaction.

Don’t simply hire the first advisor who contacts you. Meet with several qualified professionals, ask about their experience, understand their fee structures, and determine how they’ll add value throughout the process.

The Bottom Line

When your financial records are clean, your legal documents are organized, your operations are well documented, and your advisory team is in place, buyers gain confidence.

Confidence leads to stronger offers, smoother negotiations, fewer surprises, and a much greater likelihood of reaching the closing table.

Remember, preparing your business for sale isn’t an expense—it’s one of the highest-return investments you can make before putting your company on the market.

“Get five or six of your smartest friends in a room and ask them to rate your idea.”

– Mark Pincus, CEO of Zynga

If you have any questions or comments on this topic – or any topic related to business – I’d like to hear from you. Put them in the comments box below. Start the conversation and I’ll get back to you with answers or my own comments. If I get enough on one topic, I’ll address them in a future post or podcast.

I’ll be back with you again next Monday. In the meantime, I hope you have a safe and profitable week.

Joe

Searching For…

NOTE TO READERS: Our “Searching For…” feature has been moved to our online community, The Brokers Roundtable℠. It will appear there exclusively from now on.

#business #businessacquisition #sellabusiness #becomeabusinessbroker #businessbrokering #businessvaluation #MergersandAcquisitions #buyabusiness #sellabusiness #realtor #realestateagents

The author is the founder of Worldwide Business Brokers and holds a certification from the International Business Brokers Association (IBBA) as a Certified Business Intermediary (CBI) of which there are fewer than 1,000 in the world. He can be reached at

The Brokers Roundtable℠ community is OPEN for new members!

Join business brokers, sellers, buyers, lenders and others, and access the resources to get deals done!

10 Days Only! 30% off our Basic and Premium programs until July 10!

Click to learn more.