Getting "Sell-Ready" in 12-24 Months
This article is the first in a three-part series from DWT's M&A practice designed to help founder- and family-owned businesses understand how buyers think and how to prepare accordingly. During the series, we'll break down the core questions buyers ask, the risks that most often erode value, and the practical phases owners can move through to make their business "sell-ready" over a 12-24 month window. These are not necessarily legal issues, but we offer our observations to work to improve the seller experience and increase the value sellers have often worked a lifetime to obtain.
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Business owners are getting older. One estimate puts the number of privately held businesses owned by people 55+ at about 12 million. The Census Bureau has also highlighted that more than half of U.S. business owners are 55 and older. Sooner or later, many of these owners will face a difficult question: What happens to the business when they step back?
For many family-owned businesses, the answer is complicated by a simple but emotional reality: The founder built a dream business through years of hard work, but the next generation may not want to run it. We see this often—the business is profitable and respected, but those next in line to take the helm aren't interested in doing so. This usually makes selling the business the most viable option.
But getting a business ready for sale isn't something that can be pulled off in a matter of weeks—let alone days. In order to maximize the value of their business, owners must spend a significant amount of time preparing for a sale.
Why? Because if the seller doesn't have their "ducks in a row" once the business hits the market—for instance, if they haven't developed a plan to address business queries quickly or confidently—the buyer gains leverage. It's important to note that most sellers lose leverage for this reason, and not because their business is weak. Simply put, any time a prospective buyer has to request more information or ask for price adjustments, delays, or better deal terms, their leverage over the seller increases. This makes it all the more imperative for owners to ensure their business is "sell-ready" before the sale process commences.
However, many founders often assume "sell‑ready" means fixing everything at once. It doesn't. Here's what it actually entails.
What "Sell‑Ready" Really Means
For starters, a sell‑ready business doesn't mean a perfect business. Rather, it describes a business that a serious buyer can understand quickly and feel comfortable owning. Ironically, last‑minute efforts to fix everything often have the opposite effect as they introduce change, complexity, and uncertainty at the exact moment buyers are trying to get comfortable.
From a buyer's perspective, being sell‑ready comes down to confidence that the enterprise will still operate smoothly post-acquisition. Specifically, buyers need answers to these four fundamental questions:
1) Will the money keep coming in?
Buyers want to know revenue isn't a fluke and won't disappear when the founder steps away. To ensure this, they look for evidence of consistent demand: repeat and diversified customers. This question is about the top line: whether the business has a repeatable way of winning work and generating revenue over time.
2) Do the profits make sense and will they hold up?
Separate from revenue, buyers closely examine the quality of earnings. They analyze margins, one‑time or discretionary costs, and pricing discipline to understand what the business actually earns on a sustainable basis. Buyers aren't looking for perfection, but they do want confidence that reported profits reflect the ongoing economics of the business and won't erode after the sale closes.
3) Can the business run without the founder?
This is often the biggest value driver and the biggest risk. Even buyers who plan to keep the founder involved will price the deal as if the founder might not stay forever. When too much knowledge, authority, or customer trust sits with one person, buyers often lower their valuation of the business. This doesn't mean a business should eliminate the founder's importance in order to be "sell-ready." But the business should be able to demonstrate that it can continue operating normally without being entirely dependent on one individual.
4) Are there any landmines?
Buyers aren't asking whether everything is perfect, but they are asking whether there are surprises that could blow up later. These include messy financials, unclear contracts, agreements that don't transfer, or informal arrangements that only exist "in practice." All of these create risk. The more uncertainty buyers see here, the more leverage shifts away from the seller.
Taken together, these four questions explain how buyers assess risk, confidence, and value. They also show why becoming sell‑ready isn't something that can be accomplished through a single project or last‑minute push, but through a series of deliberate steps taken over time.
The work required to answer these questions well tends to fall into a predictable sequence. Over time, most businesses move through a set of phases that gradually reduce buyer risk, increase clarity, and strengthen leverage. What follows is a high‑level roadmap of that process. Each phase will be explored in more detail in future articles.
A 12-24 Month "Sell-Ready" Timeline
Phase 1 (Months 0-3): Get organized and pick priorities
Goal: Gain a clear picture of the financial questions buyers will ask.
In this phase, the focus should be on consistency rather than trying to make things overly complex or advanced. Many owners make the mistake of completely revamping their financial systems when what's really needed is simple, dependable monthly financial reporting. Achieving reliable numbers requires putting solid financial controls in place, so buyers can accurately evaluate how much money the business is likely to earn in the future.
At its core, an M&A transaction is about the reliability of future cash flows, which is what a buyer is ultimately purchasing. Sellers can demonstrate a reliable income stream through third-party financial statement reviews, quality of earnings, and a valuation. These steps are typically led by financial advisors rather than legal counsel, but they can significantly streamline legal diligence and deal execution.
Phase 2 (Months 3-9): Make the business easier to run and easier to buy
Goal: Reduce single-person risk and create strong operating habits.
This is where ownership gets clarified, systems and processes get established, and key contracts get organized before a buyer is looking over your shoulder.
Phase 3 (Months 9-15): Ready for buyer questions
Goal: Reduce surprises and speed up diligence.
Preparation here is less about documentation volume and more about responsiveness. If a buyer asked for key data on short notice, could you deliver it cleanly and confidently?
Phase 4 (Months 15-24): Build the people plan
Goal: Show the business will be stable after closing.
For many founders, this phase is harder than the sale itself. Buyers want clarity on who will run the business after the sale, which individuals are essential to continuing operations, and how those people will be retained through the transition.
The Bottom Line
Preparing a business for sale doesn't happen overnight. The companies that command the strongest valuations are typically the ones that start early, address potential concerns before buyers raise them, and create the clarity and confidence buyers are looking for.
The phases outlined above are not about perfection—they're about reducing uncertainty and strengthening the seller's position long before negotiations begin. In the next article in this series, we'll take a closer look at Phase 1 and 2, diving into the practical steps owners can take to start preparing their business for a successful sale.
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George Blankley IV is an associate in the Portland office and Matt LeMaster is a partner in the Seattle office of DWT. For questions or more insights, please reach out to George or another member of our corporate & business transactions team and sign up for our alerts.