What if I need to sell in six months, not three years?

Then you do the parts of this plan that move fastest: clean statements, a documented add-back schedule, a lease check, and a frank list of the dependencies a buyer will find. You may not fix owner dependence in six months, but you can price it honestly and plan a transition that gives the buyer comfort.

Should I tell my staff I am preparing to sell?

Not in the preparation phase. Describe the work truthfully as making the business run better, which it is. Delegating decisions, writing procedures and formalising agreements are things good owners do regardless of a sale. The confidentiality question becomes real when buyers start visiting.

Do I need a valuation before starting the preparation?

We recommend it. A valuation shows which drivers are weak in your specific case, so you spend the preparation years on the things that will move your price rather than on a generic checklist. It also gives you a baseline to measure progress against.

Is it worth investing in growth right before a sale?

Only if the results will show up in the statements before you go to market. A buyer pays for proven earnings and will give you little credit for a forecast. Investments that pay back inside the window are worth making, and investments that pay back afterwards are better described in the package as opportunities.

Preparing your business for sale over 12 to 36 months

The best time to prepare a business for sale is three years before you want to leave. The second best time is today. Preparation is the difference between a buyer paying for a system and a buyer paying for a job, and the gap between those two prices is usually larger than any negotiating tactic can recover.

This guide lays out the work in the order we recommend to owners in British Columbia. It assumes you have a valuation in hand, because the valuation tells you which of the drivers below are weak in your case. If you do not have one yet, start there.

Year one, records and structure

The first year is about making the business legible. Move to monthly financial statements that reconcile to the bank, and have your CPA prepare year-end statements at the review level if you can. Separate personal expenses from business expenses now, so that the add-back schedule in three years is short and credible. Clean up the balance sheet: write off stale receivables, dispose of obsolete inventory, and settle shareholder loans.

Ask your lawyer and CPA, this year rather than later, how your corporate structure affects a sale. Questions to put to them include whether a share sale is realistic, whether there are assets inside the company that a buyer would not want, and whether a reorganisation now would make a future sale simpler. Do not act on your own reading of the tax rules. The timing of some planning steps matters, which is why this belongs in year one.

Year two, removing yourself

The second year is about owner dependence. Make a list of every decision, relationship and task that only you handle, then move each one to someone else or to a written procedure. Introduce your top customers to a second person on your team. Give a manager signing authority within limits. Document how you quote, how you buy, how you hire and how you handle a complaint.

Test it by taking a real break. Two weeks away with your phone off tells you more about the business than any consultant can. What broke is your list for the rest of the year. Buyers will ask what happens when you leave, and the only persuasive answer is that you have already left for a while and it was fine.

Year two as well, revenue quality

In parallel, work on the shape of the revenue. If one customer carries a large share of sales, win smaller accounts to dilute them, and try to put the large one on a written agreement. Convert handshake arrangements with suppliers into contracts that can be assigned. Introduce service agreements or recurring billing where the industry allows it.

Look hard at pricing. Owners often leave prices unchanged for years out of loyalty, and a modest increase that holds improves earnings and, through the multiple, the price many times over. Make these changes early enough that a buyer sees them in two full years of statements rather than in a forecast.

Year three, contracts, people and the package

In the final year, make sure everything a buyer needs to continue the business is transferable. Negotiate a lease renewal with assignment rights if the lease has less than a few years to run. Confirm licences, permits and certifications can be transferred or reissued, and find out how long that takes. Put key employees on written agreements with reasonable confidentiality and non-solicitation terms, drafted by your lawyer.

Then build the package. A confidential information memorandum describes the business, its market, its people, its numbers and the reasons someone should buy it. A data room holds the documents behind every claim. At BizSell.ca we prepare both as part of the sell-side engagement, but the raw material comes from the two years of work above.

Three years of financial statements with a documented add-back schedule
Lease, licences, supplier and customer agreements, all assignable
Organisation chart, job descriptions and written procedures
Equipment list with condition and replacement timing
A short list of growth opportunities you have not pursued, with evidence

The one rule that overrides the plan

Keep running the business as if you intended to own it for another decade. Buyers and their accountants can tell when spending on maintenance, marketing or staff was cut in the final year to inflate earnings, and they will either adjust the price or wonder what else was dressed up. The preparation above improves the business. That is why it improves the price.

If you want help sequencing this for your own company, a Strategy Session with Ali runs 90 minutes for $499, by video, phone or in person in Vancouver. Call or text (604) 632-4959.