How to Prepare Your Business for Sale in 90 Days (Complete Checklist)

Thinking about selling your small business but unsure where to start? Many business owners overlook key steps in their exit strategy. This can drag out the process.

This complete checklist walks you through everything needed to prepare in just 90 days. It covers financial cleanup to operations tweaks.

 

Days 1-30: Financial Cleanup

Buyers scrutinize finances first. Use the initial 30 days to clean up your books. This shows sustainable profitability.

Make financial statements transparent and normalized. This supports accurate business valuation. It builds trust during due diligence.

Organize records, resolve debts, and prepare profit and loss statements. This presents a buyer-ready business.

Many small business owners overlook normalization. It adjusts for owner-specific costs. Clean finances highlight true profitability and cash flow.

Organize Financial Records

Gather and organize all financial documents. This shows a clear picture of your business health.

Compile 3 years of tax returns and audited financial statements. They prove consistent performance. This aids succession planning.

Follow this numbered checklist for efficiency.

1. Compile 3 years of tax returns and audited financial statements (time: 1 week).
2. Reconcile accounts receivable and cash flow statements to match bank records.
3. Use tools like QuickBooks export or Excel for summaries of revenue and expenses.

Many make the mistake of incomplete records. Scan everything into a secure data room.

Include customer base details tied to accounts receivable. This speeds up LOI reviews by buyers.

Resolve Outstanding Debts

Clearing debts improves your balance sheet. It signals financial stability to buyers.

List all obligations. Present a clean picture during due diligence.

This boosts cash flow and enhances business valuation.

Take these actionable steps promptly.

1. List all debts with vendors, loans, and credit lines (1-2 days).
2. Negotiate payoffs or payment plans with creditors.
3. Document resolutions with receipts and updated statements.

Avoid delaying supplier disputes. They harm relationships and revenue projections.

For example, settle a $10,000 vendor invoice with a lump sum. Result: Stronger EBITDA multiples for business valuation.

Prepare Profit & Loss Statements

Normalize your profit and loss statements. Reflect true earning potential by removing owner-specific expenses.

Calculate SDE (Seller’s Discretionary Earnings – adds back owner perks to show true profit). This shows sustainable profits.

This normalization is key for business brokers and M&A advisors.

Follow these steps for clean P&Ls.

1. Calculate SDE by adding back personal expenses like family salaries or non-essential travel (3-5 days).
2. Create clean P&L for last 3 years, adjusted for one-time costs.
3. Use free templates from U.S. Small Business Administration for structure.

Document add-backs clearly, such as owner’s personal vehicle costs. Build buyer trust.

This reveals the business’s potential without the key man influence. Share in your CIM for early interest.

Days 1-30: Legal & Compliance Check

Ensure all legal documents are current. Pass due diligence smoothly and avoid deal breakers.

Address compliance issues early. Buyers scrutinize these areas.

• Update shareholder agreements.
• Check licenses and certifications.

Update Corporate Documents

Fresh corporate records demonstrate good governance. Reduce risks during buyer review.

Gather foundational papers like articles of incorporation and bylaws. Reassure buyers about business structure.

Complete these tasks in about 1 week.

• Update articles of incorporation, bylaws, and shareholder agreements in 2-3 days. Amend outdated clauses on leadership succession or voting rights.
• File overdue annual reports with state authorities.
• Obtain a certificate of good standing from your state.

Avoid expired filings. They scare buyers during due diligence.

Audit Contracts & Licenses

Review all contracts, agreements, and licenses and certifications. Confirm they are active and transferable.

Inventory key agreements. Spot issues early.

1. Inventory customer contracts, leases, and vendor agreements in 3 days. Check non-compete clauses or auto-renewals.
2. Verify business licenses, permits, and insurance policies are current. Confirm coverage for assets.
3. Note expiration dates and renewal status. Flag non-transferable items early.

Days 31-60: Operations Optimization

Streamline operations. Prove your business runs independently.

Reduce key man risk. Boost business valuation. One of our hidden gems for maximizing valuation involves partnering with top business brokers.

Document Key Processes

Create detailed operational manuals. Include a brand overview to show full business value.

Map core processes like sales, inventory, and customer service. Use simple tools like Google Docs.

1. Map core processes such as sales funnels, inventory tracking, and customer service workflows in the first week.
2. Write simple operational manuals using tools like Google Docs.
3. Include flowcharts to visualize steps.

Add screenshots and step-by-step instructions. Detail how to process accounts receivable in your CRM.

Reduce Dependencies on Owner

Minimize owner involvement. Delegate key tasks to employees.

1. Delegate key tasks to employees. Create training logs over five days.
2. Implement systems like CRM software or project management tools.
3. Simulate a two-week owner vacation. Monitor performance with metrics.

Days 31-60: Asset Valuation

Accurately value assets. Support your asking price.

Prepare for professional appraisals by working with experienced business brokers. Quantify tangible and intangible holdings.

Inventory Physical Assets

Catalog all tangible assets. This shows their contribution to business value.

Create an inventory list with descriptions, purchase dates, and current use. Appraise high-value items.

For example, value a delivery truck based on mileage and maintenance records.

Photograph each item. Record serial numbers for verification.

This prepares you for buyer inspections and purchase agreements. Store images in your data room alongside business records.

Asset	Value	Condition
CNC Machine	$25,000	Excellent, low hours
Company Van	$15,000	Good, recent service
Office Furniture	$5,000	Fair, functional
Warehouse Real Estate	$300,000	Very Good, leased option

Use this table format to track everything. It simplifies SDE calculations.

Business brokers love organized lists during sales.

Value Intellectual Property

Find hidden value in your intellectual property. List trademarks, patents, copyrights, and custom software first.

Many owners overlook these gems when selling.

Gather registration documents and contracts for each item. Check comparable sales or talk to IP valuation firms for estimates.

Domain names and customer lists often pack big value.

1. Document all IP assets with creation dates and revenue ties.
2. Assess fair market value through industry benchmarks.
3. Include in your CIM and brand overview for M&A advisor reviews.
4. Protect via seller notes if transitioning to employee ownership.

A patented recipe can grow your customer base. Custom software boosts revenue forecasts.

These boost tax benefits for retirement. Private equity buyers love the clear numbers.

Days 61-90: Marketing Preparation

Make your business irresistible to serious buyers. Craft sharp sales materials in these final 30 days.

Your exit plan will draw real offers.

Organize all business records. Include updated financials and tax returns.

Team up with a broker to sharpen your pitch. This gets you ready for buyer checks and maybe an employee ownership sale.

Build a data room with contracts, IP details, and customer metrics. This builds trust and speeds deals.

Keep everything confidential to protect your business.

Show profits using adjusted SDE or EBITDA numbers. SDE means Seller’s Discretionary Earnings. EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization.

Add growth forecasts from real cash trends. This sets up a strong sale price.

Create Confidential Information Memorandum

Build your CIM over two weeks. Start with executive summary, market overview, financials, operations, and growth plans.

Highlight steady repeat customer revenue. Add brand details, customer metrics, and real growth forecasts.

• Gather three years of financial statements and normalize for one-time expenses.
• Detail accounts receivable, inventory list, and real estate assets.
• Describe operational manuals, licenses certifications, and insurance policies.
• Add sections on marketing assets and leadership succession plans.

Design the CIM professionally using tools like Canva or hire an M&A advisor. Aim for 20-30 pages with clean visuals and charts. This polished format appeals to private equity or strategic buyers seeking fair market opportunities.

Test the CIM with trusted advisors for feedback on clarity. Ensure it addresses potential concerns like key man risks or succession planning. A strong CIM accelerates interest and supports higher EBITDA multiples in negotiations.

Days 61-90: Broker & Buyer Outreach

Partner with experts and set up systems for smooth buyer interactions and deal closure. In this final phase, business owners focus on selecting a business broker to tap into qualified buyers. This step accelerates your exit strategy while preparing for due diligence.

Engage professionals who understand small business sales and can highlight your profitability, customer base, and cash flow. Review your business valuation from earlier phases to align expectations. Set up outreach systems now to attract buyers ready for a third-party sale or ESOP option.

Experts recommend prioritizing brokers with networks in private equity or Employee Stock Ownership Plan transitions. This preparation ensures purchase agreements move forward efficiently. Aim to have everything buyer-ready by day 90.

Common goals include maximizing EBITDA multiples or SDE through strong representation. Track progress with a business checklist to avoid delays in leadership succession or retirement planning.

Select Business Broker

Choose a broker experienced with small business sales to access the right buyer network. A skilled broker connects you to buyers interested in your revenue projections, intellectual property, and operational manuals. This choice impacts your final sale price and timeline.

Compare options between a business broker and M&A advisor to find the best fit. Brokers often work on commission while advisors charge hourly. Use criteria like fees, experience, and network strength to decide, similar to resources from the U.S. Small Business Administration.

Criteria	Business Broker	M&A Advisor
Fees	Typically 8-12% commission on sale, often based on SDE	Hourly rates or fixed fees using EBITDA multiples
Focus	Small to mid-size businesses, confidential sales	Larger deals, complex structures like ESOP sale
Network	Local and regional buyers	Private equity, strategic acquirers
Services	Marketing Confidential Information Memorandum (CIM), buyer screening, negotiation	Valuation, deal structuring

Pick the right broker partner with these steps. Interview three candidates from the IBBA directory.

Check their track record with deals like yours.

1. Interview 3 candidates via IBBA directory for diverse perspectives.
2. Review track record with similar deals, asking for references.
3. Sign an exclusive agreement to focus their efforts on your sale.

Ask about ESOP or private equity connections to explore tax advantages and employee ownership paths. ESOP means Employee Stock Ownership Plan.

Prepare for Due Diligence and Letter of Intent (LOI)

Organize a virtual data room to facilitate buyer investigations post-LOI. This secure space holds all business records for efficient review. Buyers expect quick access to verify your claims on profitability and customer base.

Set up your data room in two days with Dropbox or DealRoom. Upload financials, tax returns, and inventory lists.

Add customer lists, employee contracts, real estate info, licenses, insurance, and marketing materials.

• Set up secure data room (e.g., Dropbox, DealRoom, or LastPass, 2 days).
• Upload all prior docs plus customer lists, employee agreements, and SBA loan details.
• Prepare Q&A responses for common inquiries on EBITDA normalization and key man risks.

Don’t miss documents. Use the U.S. Small Business Administration checklist.

Prepare brand overview and cash flow analysis. Due diligence takes 30-60 days after LOI.

Organize folders logically, such as for intellectual property or operational manuals.