Prepped Resource Guide

Before anything else, get clear on what you actually want out of a sale. This chapter walks through your financial, personal, and business goals, and why knowing your number and timeline shapes everything that comes after.

Action items:

• Write down your most important financial goals for the sale. Be specific about dollar amounts and what you plan to do with proceeds.
• Write down your most important personal goals, including your desired role, timeline, and post-sale lifestyle.
• Write down your most important business goals, including what you want for employees, customers, and the company's culture after you exit.
• Identify your target sale date and work backwards to estimate how much preparation time you have.
• Complete the Sale Goals and Priorities Exercise to rank your most important sale objectives.
• Share your written goals with close family and your advisory team.

Every sale is unique, but most follow the same steps. This chapter covers every stage of the process, from choosing between a single buyer and a competitive process to friction points that can trip up unprepared sellers.

Action items:

• Determine whether a single-buyer or multiple-buyer process is likely to be right for your situation.
• Familiarize yourself with each step of the sale process so nothing surprises you later.
• Understand that the full process typically takes six to nine months from entering the market to closing, and factor this into your planning timeline.

Not every dollar of EBITDA is treated equally by buyers. This chapter breaks down the seven drivers of Transferable Value, the qualities that make your company easier to sell and more valuable once you do, and why the work to build them takes time you may not think you have.

Action items:

• Review the seven drivers of Transferable Value and discover your Transferable Value Score™.
• Identify which drivers represent your company's greatest strengths and emphasize these during the sale process.
• Identify which drivers represent your greatest weaknesses and discuss with your advisors whether to address them before selling or proceed despite them.
• Conduct a cost-benefit analysis on any major improvements you're considering: how long will they take, what will they cost, and how much might they increase your valuation?

Buyers will scrutinize your financials more closely than anyone ever has. This chapter covers how to calculate a defensible Adjusted EBITDA, clean up your balance sheet, and decide whether a pre-sale audit or Quality of Earnings study is worth the investment.

Action items:

• Confirm you have at least five years of clean, consistent historical financial statements.
• Verify your monthly close process produces statements within 10 to 20 days of month-end.
• Calculate your company's AEBITDA and prepare a documented, defensible add-back schedule.
• Review your balance sheet for legacy items, personal assets, shareholder receivables, or non-operating items that need to be removed or explained.
• Analyze 12 to 24 months of working capital data to understand your company's normalized working capital needs.
• Discuss with your advisors whether a pre-sale audit or QofE makes sense for your situation.

Buyers aren't just paying for what your company has already done, they're paying for what it can still become. This chapter covers what belongs in a strategic growth plan and how to build a financial forecast credible enough for buyers to actually believe.

Action items:

• Assess whether your company has a current written strategic growth plan; if not, begin developing one or work with your advisors to prepare a condensed version.
• Identify your company's most significant and credible growth opportunities and document them clearly.
• Conduct a SWOT analysis or a Porter's Five Forces assessment as inputs to your growth story.
• Evaluate your company's budgeting level (1 through 4) and address gaps before going to market.
• Prepare or refine an annual budget that is defensible, realistic, and that your company has a strong chance of meeting or exceeding during the sale process.
• Extend your annual budget into a three-to-five-year pro forma projection tied to your strategic growth plan.
• If your team lacks budgeting experience, consider engaging a part-time CFO with M&A experience before entering the market.

Guessing at your company's value is one of the most expensive mistakes a seller can make. This chapter explains what a proper Market Check involves, how the two main types of buyers think differently about valuation, and what actually moves your multiple up or down.

Action items:

• Resist the urge to rely on rules of thumb or anecdotes to estimate your company's value, and conduct a proper Market Check instead.
• Work with your advisors to gather comparable transaction data from your industry and company size range.
• Have your advisors conduct no-name outreach to active buyers and investors in your sector to get a realistic valuation range.
• Identify which type of buyer, strategic or financial, is most active in your sector and most aligned with your goals.
• Review the characteristics that enhance and weaken value in your sector and identify which apply to your company.
• Use market research findings to determine whether to accelerate, delay, or adjust your sale timeline.
• Use the valuation range from your Market Check to stress-test your financial goals and confirm the expected price range is sufficient to meet your objectives before proceeding.

A sale can put pressure on business partnerships that have worked fine for years. This chapter walks through a five-step framework for getting co-owners aligned before you go to market, and why documenting your agreements in writing matters as much as reaching them in the first place. If you're the sole owner of your company, feel free to skip ahead. 

Action items:

• Have each partner independently write down their individual sale goals, financial needs, and post-sale plans before discussing as a group.
• Hold a structured partner alignment meeting to establish collective sale objectives, and consider engaging an outside advisor to facilitate.
• Agree on a clear definition of what a "successful sale" looks like for the partnership as a whole.
• Designate a "deal captain" responsible for coordinating communication, information flow, and deadlines during the sale process.
• Clarify decision-making authority: will decisions require unanimous consent, majority vote, or designated authority?
• Review your operating agreement or shareholder agreement to confirm it addresses a potential sale scenario.
• Align on each partner's expected post-sale role, compensation, and timeline before entering the market.

Selling a company well takes more than one advisor. This chapter breaks down the three roles every deal team needs, what an investment banker actually does and when to bring one in, and how to evaluate whether the people you're considering are the right fit for a deal of your size.

Action items:

• Engage an exit advisor as your first step; they will help coordinate the rest of the team.
• Confirm your existing accounting and tax advisors have meaningful M&A experience, and if not, identify specialists.
• Identify and engage an M&A attorney before signing anything.
• Ensure your core team is communicating with each other, not just with you individually.
• When you are ready to go to market, interview at least three investment banking firms before selecting one.
• Confirm all advisors' compensation structures are fully transparent and aligned with your goals.

The sale of your company may create the single largest tax bill you'll ever face. This chapter isn't a substitute for advice specific to your situation, but it covers the difference between an asset sale and a stock sale, and the questions worth putting in front of your tax advisor now, while you still have time to act on the answers.

Action items:

• Meet with a tax advisor who has M&A-specific experience.
• Determine your company's current legal structure and understand its implications for how the sale will be taxed.
• Ask your advisors to model the after-tax proceeds of both an asset sale and a stock sale scenario for your specific situation.
• Identify your tax basis and any special considerations, such as loss carryforwards.
• Evaluate your exposure to state and local taxes, particularly if your business operates across multiple states.
• Explore whether pre-sale planning strategies such as charitable giving, gifting, or QSBS eligibility apply to your situation.
• Instruct your tax advisors to provide real-time after-tax modeling of any offers you receive during the sale process.

Who you tell, when you tell them, and how you tell them can shape whether your sale process stays on track. This chapter covers how to identify your need-to-know circle, communicate with them honestly without overpromising, and coordinate the broader announcement once the deal is done.

Action items:

• Limit early knowledge of the sale to the smallest possible group of people.
• Identify the employees whose involvement in the sale process is unavoidable.
• Assess each need-to-know employee's ability to handle confidential information before bringing them inside.
• Discuss with your legal advisor whether need-to-know employees should sign NDAs, and consider pairing them with stay bonuses to incentivize key employees to remain through closing.
• Prepare honest, thoughtful answers to the questions that need-to-know employees are likely to ask.
• Avoid making promises about post-sale employment, culture, or benefits that you cannot control or guarantee.
• Coordinate with your buyer and advisors on a joint communication plan for announcing the transaction to the broader organization at closing.

Due diligence is where deals slow down or fall apart, often over things sellers could have organized months earlier. This chapter covers what buyers are actually looking for, the categories of documents they'll request, and how to get organized before they ask.

Action items:

• Confirm that all key legal documents are current, properly executed, and readily accessible.
• Ensure five years of financial statements, tax returns, AEBITDA schedules, and AR/AP aging reports are clean and organized.
• Review HR documentation for completeness: employment agreements, non-competes, benefit plans, and any pending claims.
• Confirm all IP ownership is properly documented and assigned.
• Identify any legal, regulatory, financial, or operational issues that could surface during diligence; address what you can, and prepare clear explanations for what you cannot.
• Discuss with your advisors the setup of a virtual data room for organizing and sharing documents securely with buyers.
• Proactively manage your business performance during the sale process; due diligence is precisely when you can least afford a performance dip.

Selling your company is a financial transaction and a personal transition happening at the same time, and the second part gets far less attention than it deserves. This chapter covers the emotional challenges owners commonly face and practical ways to start preparing for life on the other side of a sale.

Action items:

• Honestly assess which of the common emotional challenges resonate with your situation.
• Identify two or three people you can speak candidly with during the sale process.
• Begin exploring what your post-exit life looks like before you exit.
• Practice unplugging from the company now by taking at least two consecutive weeks away and observing how the business performs without you.
• Talk openly with your spouse or partner and close family about your plans and expectations for life after the sale.
• Check the warning signs for post-exit struggle.
• After exit, give yourself at least three months of rest and reflection before making major commitments.
• Expect dead ends in your post-exit chapter, and realize they are normal.

Prepped covers the essentials, but some of the topics are worth a deeper dive. This list of recommended resources includes the books, podcasts, and peer networks we often point owners toward when they're getting ready for a sale.