Preparing for the sale of a business

How to ensure sale readiness

If you’ve previously raised equity, you can reflect on what worked well and what caused friction. If this is your first transaction, consider engaging an advisor early — ideally 12 to 24 months in advance. A good advisor can help identify key areas to address, reducing execution risk and maximising value.

Assessing your business’s readiness for sale involves a thorough review of its financial, operational, commercial and legal aspects. You’ll need to demonstrate not only historical performance and competitive positioning, but also present a compelling growth plan that underpins your financial projections — the core of what buyers are ultimately investing in.

Documenting key risks and maintaining a robust business plan will help you retain control of the process and maintain high momentum.

Much of the preparation can be supported by advisors, enabling you to stay focused on what matters most — running the business and hitting your numbers.

Five steps to assess sale readiness

1. Identify and address key risks: Tackle issues such as customer concentration, supplier dependency, “key person” risk, or regulatory exposure before they become red flags in due diligence.
2. Review financial performance and forecasts: Ensure your financial model is well-structured and supported by credible, data-driven assumptions that align with your growth narrative. Maintain clear supporting schedules for key accounts across the historic review period.
3. Strengthen internal processes and controls: Buyers will assess the quality of your systems, reporting and governance frameworks.
4. Organise legal and commercial documentation: Ensure contracts, IP ownership, employment agreements and compliance records are complete and up to date.
5. Develop a compelling equity story: Articulate your value proposition, market opportunity and the strategic rationale for the sale in a clear and compelling way.

Common challenges impacting sale readiness

• Inconsistent financial reporting: Poorly structured or inaccurate accounts can erode buyer trust and reduce valuation. Aim for at least three years of monthly management accounts with itemised reconciliations to audited financials.
• Weak forecasting models: Buyers expect projections backed by robust, evidence-based assumptions and relevant market data.
• Unclear ownership of IP or key assets: Legal ambiguity around assets can delay or derail a deal.
• Overreliance on key individuals: A business overly dependent on its founder or select team members poses a continuity risk. A capable, independent management team is crucial to post-transaction success.
• Lack of strategic clarity: Without a clear vision and market positioning, justifying a premium valuation becomes difficult.
• Poor data room preparation: Disorganised or incomplete documentation frustrates buyers and slows down due diligence.
• Unresolved disputes or liabilities: Legal, tax, or regulatory issues can become deal-breakers if not addressed early.

Maintaining sale readiness

Sale readiness is not just about preparing for an exit — it’s about building a stronger, more resilient business. The same disciplines that attract investors also drive long-term value.

• Conduct regular strategic reviews to align leadership on key performance goals.
• Invest in scalable systems and processes to reduce manual workarounds and inefficiencies.
• Establish robust monthly reporting for greater visibility and control.
• Build a strong, self-sufficient management team, with founders shifting to a strategic oversight role.
• Engage advisors early to identify gaps and shape a credible business plan.
• Keep your house in order — from legal contracts to regulatory compliance.

By embedding these practices into your business now, you’ll be better positioned to seize opportunities when they arise.

How Forvis Mazars can help with the sale of your business

Our experienced advisory team works closely with founders and shareholders to prepare for a successful exit, from identifying key risks to building a compelling equity story. We help you navigate the complexities of the process, maintain momentum and maximise value at every stage.