Every founder we talk to about selling starts with the same picture in their head. They imagine a broker, a buyer, a term sheet, and a wire transfer. In their version of the story the hard part is finding the right buyer. In our experience, the hard part is what happens in the twelve months before that buyer ever sees the business.
The work that determines the price is not the pitch. It is the preparation. And most of it is unglamorous.
Month 12 to 9: the honest teardown
The first thing we do with a founder who is thinking about selling in the next year is a structured teardown of their business as an acquirer would see it. Not as the founder sees it. This distinction matters.
Founders tend to weight the parts of the business they built themselves. Acquirers weight the parts that produce cash without the founder in the room. The gap between those two views is where the valuation discount lives.
The valuation is not what you built. It is what continues to work after you leave.
A good teardown produces three lists: what will survive a change of ownership, what is priced into the multiple and needs to be defended, and what will be marked down or excluded outright. The last list is usually the longest, and the founder is usually surprised by half of it.
Month 9 to 6: paying down the founder tax
Once you have the honest teardown, the next six months are spent taking yourself out of the critical path. Every decision that only you can make, every customer who will only take your call, every process that lives in your head — each of those is a discount on the sale price. Some are worth paying down. Some are not.
Three interventions usually do the most work here:
- Owner-independent revenue. Move the top ten accounts off your direct relationship. Not next quarter. This month.
- A second signature on the numbers. Have someone other than you close the books. Buyers pay more for financials they trust and less for financials only the founder can explain.
- Documented decision rights. Write down who can approve what, in what amount, without asking you. If this document does not exist, the business is worth less than it should be.
What not to try to fix
There are things you cannot repair in six months, and pretending otherwise costs you credibility with the buyer. A concentrated customer base, a single-supplier dependency, a lease that expires next year — these are risks you disclose and price into your ask, not risks you paper over.
Month 6 to 3: the quiet market check
By this stage, the business is presentable and the numbers can withstand scrutiny. The next move is a discreet market check. Not an auction. A conversation with three or four buyers we already know are active in your segment.
The point of a quiet market check is not to sell the business. It is to hear, from real buyers with real capital, what they would pay and what they would want changed before paying it. That feedback is worth more than any comparable-transactions spreadsheet.
Occasionally the market check produces an offer good enough to accept. More often it produces a shortlist for the process that follows.
Month 3 to 0: the process itself
The last three months are the part everyone thinks about. Information memorandum, data room, management presentations, indicative bids, best-and-final, exclusivity, diligence, signing. It is intense, it is fast, and by the time you get here the outcome is largely determined by the twelve months of work behind it.
Founders who arrive at this stage with a clean teardown, low founder dependency, credible financials, and a warm shortlist of buyers close within ninety days at their target price. Founders who arrive at this stage without any of that spend twelve to eighteen months trying to compensate for the preparation they skipped — usually at a lower final price.
The compressed version, for the founder who does not have time for the full essay: start twelve months earlier than you think you need to, and spend most of those twelve months on the boring work. The market rewards preparation. The market punishes rush.
If you are inside the window we described — anywhere from twelve to thirty-six months out from a possible sale — a conversation now is worth more than a conversation later. Book a private consultation and we will tell you honestly where you stand.