1. Convert Financials to GAAP Standards

Buyers want clear and consistent financial reporting. If your business currently tracks performance using non-GAAP metrics or operates on a cash basis, convert your financials to Generally Accepted Accounting Principles (GAAP). This ensures transparency and improves buyer trust during the evaluation process.

2. Clean Up Corporate Structure

Streamline and evaluate your current legal entity structure. Ensure ownership records, shareholder agreements, and operating agreements are current. Eliminate unnecessary entities and reduce exposure to legal or tax liabilities. A clean structure simplifies the transaction and improves buyer confidence.

3. Finalize Cost Reduction Initiatives

If your team has cost-saving strategies that are not yet implemented, begin executing them before entering a transaction. Buyers do not credit hypothetical improvements. Realized savings, even if partial, are far more persuasive than future projections.

4. Establish Robust Internal Controls

Strong financial controls reduce risk and ensure accurate reporting. Standardize approval workflows, restrict access rights, and automate reconciliation processes. Buyers want to see that your business manages financial integrity without relying on manual oversight.

5. Implement Scalable Technology and Systems

Replace basic tools with systems that support growth. An ERP system or integrated financial platform shows that your company is prepared to scale. Buyers are more likely to invest in businesses with operational infrastructure that can handle future expansion.

6. Prepare for Sell-Side Due Diligence

Engage advisors to perform internal due diligence before starting a deal. Sell-side due diligence identifies risks, validates EBITDA adjustments, and helps create a strong buyer presentation. This proactive approach supports faster closing and higher deal quality.

7. Strengthen Your Leadership and Succession Plan

Evaluate gaps in your management team. If key leaders plan to exit post-transaction, start succession planning now. Ensure continuity in operations and communicate leadership stability to buyers during the process.

8. Document Operational Workflows

Buyers look for evidence of reliable execution. Document key business processes across departments to show that operations are not dependent on specific individuals. Workflow documentation also makes integration easier for the buyer post-close.

9. Improve Working Capital Performance

Review and optimize your cash flow cycles. Improve accounts receivable, renegotiate vendor terms, and reduce inventory overhead. Highlight any measurable improvement in working capital to show operational efficiency.

10. Clarify Revenue Streams and Customer Concentration

Segment your revenue by product, channel, and customer group. Identify and reduce reliance on a few key accounts. Buyers prefer diversified revenue with low customer concentration risk, especially when forecasting post-acquisition performance.

11. Review All Legal Agreements and Contracts

Audit your legal documentation. Confirm that customer, supplier, and employee contracts are enforceable, transferable, and free from change-of-control clauses that could disrupt the deal. Make necessary updates before buyers request documentation.

12. Track Key Performance Indicators and Data

Have your most important metrics ready to present. Buyers want to understand how your company performs and where it is headed. Use accurate, real-time KPIs to tell a compelling growth story. Metrics may include customer retention, gross margin by segment, revenue per employee, or cost of customer acquisition.

13. Conduct a Third-Party Business Valuation

Commission an independent valuation from a reputable firm to understand your baseline value. This prepares you for buyer negotiations, informs deal structure, and helps align internal stakeholders on expectations.

14. Secure Intellectual Property and Proprietary Assets

Ensure your trademarks, patents, and digital assets are protected and assigned to the business. Buyers will review intellectual property ownership closely, especially if technology, processes, or branding are core to your market position.