By Brian M. Smith, Co-Founder and Managing Partner
Selling a business is one of the most important financial and personal decisions a business owner will ever make. The process can be complex, but one factor consistently separates the most successful outcomes from the rest. Preparation. At LCG, we believe business owners should begin preparing for a potential sale 12 to 24 months in advance, but no less than 12 months. This lead time allows for deliberate planning, operational improvements, and strategic alignment that will directly enhance the value of the business. It also allows buyers to see at least a year of operations, supporting the valuation expectation.
When Should Business Owners Begin Preparing for a Sale?
Ideally, preparation should begin well before you’re ready to sell. The extra time helps strengthen financial reporting, optimize performance, and resolve any issues that could slow due diligence. It also provides flexibility to time the market to begin the sale process when valuations and buyer demand are most favorable.
Owners who start early can also address tax implications, restructure debt, secure recurring revenue contracts, and implement controls that demonstrate financial discipline, all of which contribute to higher valuations.
What Are the First Steps to Take?
The first step is understanding how potential buyers will view your company. This involves conducting an internal review of earnings quality, customer concentrations, and working capital efficiency. At LCG, we can help you identify gaps early, develop a plan to address them, and create a data-driven narrative that supports your valuation.
Why Does Early Preparation Pay Off?
Buyers prefer companies that are organized, transparent, and ready to move quickly. Accurate financials and complete documentation build confidence, shorten diligence cycles, and often result in competing bids. Sellers that plan ahead tend to control the process rather than react to it, achieving stronger pricing and more favorable deal terms.
Conclusion
Starting early is not about rushing a sale but maximizing value, control, and optionality. Time and money invested in preparation typically yields exceptional ROI. At LCG, we help business owners design strategic exit plans that align readiness with timing and market opportunity.