Preparing for the Sale of a Company: How to Position Yourself Best
2 October 2025
Selling a company requires thorough preparation. Forvis Mazars provides guidance on how to optimize your accounts, cash flow, and valuation to strengthen your position in the sales process.
Selling a company can be one of the most significant decisions you make as an owner. The process is often demanding, both emotionally and financially. Thorough preparation will put you in a stronger position when the opportunity arises.
| – Think of it a bit like selling your home. You might repaint the terrace, tidy up the storage room, and fix minor flaws before the viewing. The same mindset applies when you are considering selling your company, says Sivert Smedsvig, State Authorized Public Accountant and Partner at Forvis Mazars. |
Here are some critical areas to address before initiating a sale.
1. Ensure Financial Clarity
The first step is to have complete control over your finances. A healthy operation is not only crucial for a sale but also a competitive advantage in its own right.
| – It’s not enough to just glance at the accounts once or twice a year. Showing consistent interest in the numbers is always wise, says Smedsvig. |
Create a budget, monitor cash flow forecasts, and use them actively. A budget doesn’t need to be perfect, but it is an indispensable tool for effective planning and avoiding surprises.
| – Operating without a budget can be compared to embarking on a challenging mountain hike without a map or compass. With a clear overview of the numbers, you know when to accelerate and when it’s wise to slow down. This ensures smooth operations, explains Smedsvig. |
2. Avoid Red Flags in Your Financial Statements
When potential buyers evaluate a company, the audit report is a key source of information. Negative remarks can make both banks and investors hesitant.
| – Ensure everything is in order. Illegal loans to employees, inadequate documentation, or accounting errors create problems, notes Smedsvig. |
The same applies to dealings with public authorities. Red flags with the Norwegian Tax Administration are not only a financial burden in themselves, but they also create uncertainty around the company and may deter potential buyers.
Maintain a clear overview of who owes you money (accounts receivable) and what you owe to suppliers (accounts payable). This provides both security and trust, while also supporting the crucial cash flow.
3. Establish a Strong and Sustainable Cash Flow
It’s easy to assume that strong brands, new equipment, or talented employees are the key determinants of a company’s value. However, for operating companies, cash flow is what matters most.
| – A strong and steadily growing cash flow is what truly determines a company’s value; everything else is secondary, says Smedsvig. |
A growing cash flow increases the likelihood of achieving a higher valuation. To strengthen it, you should:
- Closely monitor outstanding accounts receivable.
- Maintain control over costs and financing structure.
- Ensure efficient inventory management.
- Be mindful of your pricing strategy.
4. Conduct an Early Business Valuation
Just as you might obtain a valuation of your home before selling, it is wise to do the same with your company.
| – It provides a reality check on whether your expectations align with the market, explains Smedsvig. |
By involving an auditor or accountant early, you can identify areas for improvement and strengthen the company’s position before the sales process begins.
Laying the Groundwork for a Successful Sale
Preparing a sale involves more than setting a price and finding a buyer. It is the combination of well-organized accounts, the absence of negative remarks, a healthy cash flow, and a realistic valuation that positions you best for a successful deal.
| – Many owners wait too long to involve an advisor. My advice is to start early, giving you time to take the right steps, concludes Smedsvig. |
Would you like a financial health check of your company?
Forvis Mazars is happy to assist you in reviewing your accounts, assessing cash flow, and ensuring proper liquidity. This will put you in a stronger position when you decide to sell and, in any case, better position your business for profitable growth.
Want to know more?