Want to Sell Your Business? Start Now. 

Author: Andrew R. Silverman, Business Attorney at MacElree Harvey, Ltd.

Imagine staring into your computer as a grid of unfamiliar faces—lawyers, accountants, and private equity professionals—fires questions at you about every corner of your business: financials, taxes, contracts, leases, customers, suppliers, employees, ownership, intellectual property, equipment, inventory, A/R, A/P, and more. The questions keep coming, rapid and relentless, and for hours you are expected to have clear, consistent answers. Would you? 

The reality is that the more prepared you are when that moment arrives, the easier and more successful the process will be. Buyers–whether private equity firms or SBA-backed individuals– are looking for businesses they can understand, trust, and step into with confidence. These buyers are willing to pay more for that certainty. The best outcomes do not come from scrambling after a letter of intent is signed. They are the result of years of consistent financial reporting, clean corporate hygiene, documented relationships, and disciplined planning. 

What You Can Do Right Now 

Regardless of timing, owners can immediately improve exit readiness by reducing legal, financial, and operational ambiguity. 

• Document all related party arrangements, including leases and loans to owners 
• Get financials clean, consistent, and explainable 
• Confirm ownership and equity structure is clear and documented 
• Ensure all material contracts are signed and accessible 
• Eliminate “handshake” arrangements—reduce all agreements to writing 
• Centralize key documents (basic data room: organizational documents, tax filings, financials, employment agreements, IP, and contracts) 
• Reduce reliance on any single person, customer, or vendor 

Ask yourself: if you had to explain your business to a buyer tomorrow, what would be unclear—or undocumented? 

Startup Phase: Build for Transferability 

At formation, most owners are focused on getting a product or service into the market. While exit may not be top of mind, the decisions made at this stage will shape both how the business operates—and how easy it is to sell later. 

• Establish a clean legal structure—be deliberate about entity type, tax treatment, and cash flow 
• Ensure all intellectual property is clearly owned by the company, including through written assignments from employees and contractors 
• Avoid commingling and informal practices from the outset 
• Document all key relationships (employees, customers, vendors) 
• Require baseline protections (confidentiality and IP assignment agreements) 
• Establish financial discipline early 
• Build a trusted advisory team (accountant, banker, and legal counsel) 

You are not just building a business—you are building an asset someone else must be able to step into. 

Five Years from Sale: Institutionalize the Business 

At this stage, the business is established and performing. The focus shifts from growth to making the business legible—and credible—to a third party. Buyers are evaluating not just what the business can do, but how reliably it can continue to do it without you. 

• Develop management depth beyond the founder 
• Improve financial credibility—establish reviewed or audited financial statements and document any deviations or non-standard practices 
• Identify, resolve, and document any issues in the financials that require explanation (e.g., unusual accounting treatments, slow A/P, inconsistent margins) 
• Clean up legacy contracts and unresolved issues 
• Address customer concentration risk where possible 
• Evaluate tax and entity structure with a view toward an eventual exit and clarity to the buyer 

Buyers rarely expect perfection—but they quickly lose confidence where things are unclear. 

One Year from Sale: De-Risk the Transaction 

At this stage, the goal is to eliminate surprises. Buyers often lose confidence not because of performance, but because of what they find once diligence begins. If you identify and resolve those issues in advance, you control the narrative—and reduce the risk of late-stage disruption. 

• Conduct a mock diligence review—what will a buyer find when it reviews your business and its documents? Find those issues now—before the buyer does 
• Organize contracts, financials, and corporate records into a clear, accessible structure 
• Clean up working capital and unusual balance sheet items (common sources of price adjustments) 
• Resolve disputes, contingent liabilities, and informal arrangements before they surface in diligence 

At this stage, you are not increasing value—you are protecting it. 

Six Months from Sale: Optimize for Execution 

As a sale process begins, the focus becomes execution: speed, clarity, and credibility. At this point, preparation is visible—and it directly impacts how smoothly the process runs and how confident buyers feel. 

• Prepare a fully organized, diligence-ready data room 
• Ensure financial performance and the business narrative are consistent and explainable 
• Identify and resolve third-party consents and approvals in advance 
• Anticipate and prepare for key negotiation points (price adjustments, indemnification, etc.) 
• Maintain steady performance—buyers closely monitor any changes during the process 

Deals rarely fail late because of price—they fail because of uncertainty or loss of confidence. 

Closing Thought 

The best exits are not engineered at the end—they are revealed over time. The sale process effectively begins long before you decide to sell—often before the business is even formed. The earlier you approach your business with that reality in mind, the more control you will have over the outcome when the time comes. 

Andrew R. Silverman is a business attorney at MacElree Harvey, Ltd., where he represents clients in a wide range of corporate and commercial matters. His practice includes business formation, governance, contracts, mergers and acquisitions, succession planning, and general counsel services for businesses of all sizes. Andrew works closely with business owners and executives to provide practical, strategic legal guidance tailored to their goals.