The twelve-month plan to prepare your business for sale

By Michael D. Rubin, CEO & Founder · September 2026 · 1,624 words

The twelve to twenty-four months before a sale decide the multiple, and almost none of that work can be done once a letter of intent is signed. If you are thinking about selling within two years, the highest-return thing you can do this quarter is not find a buyer. It is make the company worth more to whoever eventually buys it.

Here is the work, ranked by what it is worth rather than by how hard it is.

Months 1–3: find out where you actually stand

Start with an honest baseline: what the company is worth today and why. A confidential opinion of value costs nothing, and a formal valuation is worth its fee if you need a defensible number.

In the same quarter, look at the business the way a buyer's diligence team will. The four questions they answer first are: are the earnings real, are they repeatable, how concentrated is the customer base, and does this thing run without the owner?

• Reconcile three years of financial statements to the tax returns and fix every difference
• Build the add-back schedule, with documentation behind every line
• Produce revenue by customer for three years and see the concentration in front of you
• Write down every task only you can do — that list is the price discount, in longhand

Months 3–9: reduce owner dependence

This is the single largest lever, and the slowest. If customers buy because of you, if pricing lives in your head, if every quote needs your approval, then a buyer is purchasing a job rather than a business — and pays accordingly.

The work is unglamorous and specific:

• Introduce a second face to your top customers, and let that person lead the relationship for a full cycle before you sell
• Write down what you know: pricing logic, quoting rules, supplier terms, the reasons behind the exceptions
• Promote or hire one layer of management, and let them make decisions you would have made — including some you would have made differently
• Take a two-week holiday and do not answer the phone. What breaks is your list; what does not break is what you have already fixed

Months 3–12: improve the quality of the revenue

Buyers pay a multiple of earnings, but they choose the multiple based on how confident they are that the earnings repeat.

• Convert ad hoc work to contracted or recurring revenue wherever the market allows. This is worth more than an equivalent increase in sales.
• Reduce customer concentration, either by growing others or by putting the large one on a longer written contract with an assignment clause that survives a change of control
• Check every material contract for change-of-control language. A clause that lets your largest customer walk on a sale hands them a veto over your transaction
• Raise prices where you have been avoiding it. A 3% price increase that holds goes almost entirely to EBITDA, and then gets multiplied

Months 6–12: remove the reasons for a discount

What not to do

Some things owners do in the year before a sale actively cost them money.

• Do not cut costs artificially to inflate one year's EBITDA. Diligence normalizes it, and the attempt damages your credibility on everything else.
• Do not stop investing. A business visibly running down is priced as one.
• Do not tell your team. A sale can fail at any point until the money is wired; an announcement cannot be withdrawn. When to tell employees.
• Do not change your accountant, systems or entity structure in the final six months unless there is a tax reason. Continuity in the records is worth more than the improvement.
• Do not take the first unsolicited approach seriously without a market check. What to do with an unsolicited offer.

Months 9–12: get ready to go to market

• Build the data room before you need it — three years of financials, tax returns, contracts, leases, licenses, equipment schedules, customer analysis, organization chart
• Engage a transaction attorney, not the attorney who wrote your lease
• Model the tax outcome of an asset sale versus an equity sale with your CPA, and know which you want before a buyer asks
• Agree with your advisor what the blind profile will say and how your market will read it
• Decide, in advance, what you would accept — price, structure, transition period, what happens to your people

What this is worth

We are deliberately not going to quote a percentage uplift here; anyone who does is guessing at your company. What we can say is which of these changes moves the number most, and it is consistently the same order: owner dependence first, revenue quality second, record quality third, everything else after.

That ranking is why a pre-exit engagement is worth starting a year out and rarely worth starting a month out. If a sale is on your horizon, the cheapest conversation you will ever have is the early one. That is what pre-exit consulting is, and it starts with knowing what the company is worth today.

What it costs to prepare, and what it returns

Preparation is not free, and it is worth being clear about where the money goes. A transaction-literate CPA to reconcile three years and build the add-back schedule; possibly a formal valuation; possibly a modest amount of legal work to renegotiate a lease or a change-of-control clause; and the management time of doing the delegation work properly.

Set against that: the discount a buyer applies for owner dependence, unreconciled records or an unexplained earnings swing is applied at the multiple, not at the cost. A $50,000 add-back a buyer refuses to accept costs $250,000 in a business selling at five times. That arithmetic is why preparation is the highest-return work available to an owner within two years of a sale, and why we would rather have the first conversation early than be handed a company that is going to market next month.

A quarter-by-quarter view

What to do about customer concentration

It comes up in most engagements, so it deserves its own answer. If one customer is a large share of revenue, a buyer will price the risk — but how much depends on things you can influence within a year.

• Get it in writing. A verbal relationship of fifteen years is worth less to a buyer than a two-year contract, however unfair that feels.
• Check the assignment clause. A contract that terminates on change of control gives your largest customer a veto over your sale. Renegotiate it now, while you are not visibly selling.
• Spread the relationship. If only you know their people, the buyer is right to worry. Introduce a second person and let them lead for a full cycle.
• Grow the others. The fastest arithmetic improvement is usually growing the rest of the base rather than shrinking the big account.
• Document why they stay. Tooling, integration, approvals, response times — anything that makes you hard to replace reduces the discount.

Who you need around you, and when

Four people, engaged in this order:

A CPA who has worked on transactions, from twelve months out. Reconciliation, add-backs, and the asset-versus-equity tax model. Not necessarily your existing accountant, and there is no offense in bringing in a specialist alongside them.

An M&A advisor, from nine to twelve months out. Early enough to shape the preparation, not just to run the sale. How to choose one.

A transaction attorney, engaged before the letter of intent — not the attorney who wrote your lease. The purchase agreement is where the money you negotiated is either protected or given back.

A personal financial adviser, before you accept an offer. What the proceeds have to do for the rest of your life determines what offer is acceptable, and that is a calculation better done in advance.

How to tell whether it is working

Preparation can feel abstract. These are the checks that tell you it is real:

• You can hand three years of financials to a stranger without explaining anything
• You can take two consecutive weeks off and the numbers do not move
• Someone other than you leads your three largest customer relationships
• You can produce revenue by customer, backlog and an equipment schedule the same day they are asked for
• Every material contract has been read for change-of-control language in the last twelve months
• You know what you would accept, and what you would do the following Monday

Sources and further reading

• SBA — preparing to sell your business
• Exit Planning Institute