Why Planning 1–2 Years Ahead Can Dramatically Increase the Value of Your Business

For many business owners, the decision to sell doesn’t begin with a plan—it begins with a moment.

A health issue.
Burnout.
An unsolicited offer.
A realization that “it’s time.”

The difference between an average sale and an exceptional one is almost always preparation, and preparation takes time.

Owners who begin planning one to two years before going to market don’t just sell their businesses more smoothly. They sell them for more money, on better terms, and with far less stress.

The Sale of a Business Is a Process, Not an Event

In reality, the highest-value transactions are not rushed. They are carefully positioned.

Buyers—whether private equity firms, strategic acquirers, or family offices—don’t just buy past performance. They buy future confidence. And confidence isn’t built in the final months before a sale. It’s built well in advance.

For owners in their 50s and beyond, selling your business isn’t just a transaction; it’s a life transition. You may only get one chance to do it right.

How Buyers Actually Determine What Your Business Is Worth

Many owners think their company’s value is a simple multiple of earnings.
While earnings matter, buyers are ultimately pricing risk.

They ask:

• How predictable is future cash flow?

• How dependent is the business on the owner?

• How transferable are customer relationships?

• How repeatable and scalable are operations?

The more risk a buyer sees, the more they protect themselves by lowering price, demanding tougher terms, or adding earnouts.

Time is what allows you to reduce those risks credibly.

The Issues That Quietly Reduce Value—and Take Time to Fix

Most value killers aren’t fatal flaws. They’re simply problems that can’t be fixed at the last minute:

• A heavy concentration in one or two customers

• The owner personally driving sales or key relationships

• Processes that only exist in someone’s head

• Financials that blend personal and business expenses

Even if you address these issues, buyers need to see proof over time. A 12–24 month track record builds more confidence than promises made during due diligence.

Turning Financials Into a Value Story

Here’s where early preparation really pays off: You turn your numbers into a narrative buyers trust.

Buyers don’t just look at EBITDA. They look at the quality of earnings:

• Normalized owner compensation (e.g., adjusting for above-market salary)

• Clear, supportable add-backs

• Reliable, month-to-month reporting

When these are handled well in advance, you avoid surprises. In my experience, deals often fall apart not because the business is weak, but because the numbers don’t inspire confidence.

Making the Business Transferable—Not Owner-Dependent

A simple rule of thumb in M&A: The less the business needs you, the more it’s worth.

Buyers pay more for businesses that run without the owner at the center. That means:

• A strong second layer of leadership

• Customers loyal to the company, not just the founder

• Documented systems and processes for continuity

These elements take intentional effort and time to build, and the earlier you start, the stronger the hand you’ll have.

Paradoxically, the more replaceable you are, the more valuable your business becomes.

Time Creates Options—and Options Create Leverage

One of the biggest advantages of early planning? Optionality.

Well-prepared businesses attract more interest. More interest creates competition. And competition leads to better price, better terms, and more control.

Without preparation, many owners find themselves with:

• One buyer

• One offer

• One path forward

With time, you regain the leverage.

Preparing the Owner, Not Just the Business

For owners over 50, the sale is rarely just about money. It’s about:

• Retirement security

• Tax efficiency

• Legacy

• Identity

Early planning allows you to align the sale with your personal, financial, and emotional goals. Rushed decisions under pressure often lead to regret for years to come.

What Smart Owners Do Before Going to Market

Here’s what an ideal 24-month preparation timeline looks like:

24 months out

• Assess exit readiness

• Identify value gaps

• Begin documenting key processes

18 months out

• Clean up financials

• Address customer and revenue concentration

• Begin developing internal leadership

12 months out

• Position the business for buyers

• Build a track record of reduced owner involvement

• Strengthen reporting consistency

Even if you choose not to sell, the business becomes more valuable, more resilient, and easier to run.

Selling on Your Terms

Planning ahead doesn’t mean committing to sell. It means creating control:

• Control over timing

• Control over value

• Control over your future

Final Thought

You can’t time the market, but you can control your readiness. Start early, reduce risk, and give yourself the freedom to sell when you’re ready—not when circumstances force your hand. Learn more about our proven process here.