Sell-Side Preparation: How to Run a Process That Maximizes Value

The difference between an average exit and a great one isn't just about having a good business — it's about running a great process. The most successful sellers treat their exit like a project with months of preparation, a carefully assembled team, and a disciplined approach to managing buyers.

Here's how sophisticated sellers prepare.

Build Your Deal Team Early

The biggest mistake sellers make is assembling their team too late. By the time you're fielding buyer interest, you should already have:

M&A Advisor / Broker

Your advisor runs the process — positioning the business, identifying buyers, managing the data room, negotiating terms, and keeping the deal on track. The right advisor has experience in your industry, access to relevant buyers, and a track record of closing at strong multiples.

Choose an advisor 12+ months before you want to close. The best advisors are selective and may have lead times.

M&A Attorney

Not your regular business attorney. You need a lawyer who does M&A transactions regularly and understands purchase agreement nuances — R&W negotiation, indemnification provisions, working capital mechanics, employment agreements, and non-competes.

Transaction CPA / Tax Advisor

Your tax advisor needs to model the deal's tax implications under different structures (asset vs. stock, installment sale, QSBS eligibility, state tax considerations). Poor tax planning can cost you 5-10% of your proceeds.

Wealth Advisor

If this exit represents a significant portion of your net worth, engage a wealth advisor before closing. Post-exit financial planning — investment strategy, estate planning, charitable giving, liquidity management — should be in place before the wire hits your account.

Prepare Your Financial Story

Buyers don't just evaluate your numbers — they evaluate your narrative. The financial story you tell should be clear, credible, and compelling.

Normalized Financials

Prepare a detailed adjusted EBITDA or SDE schedule with documentation for every add-back. Each adjustment should be:

• Documented with supporting evidence
• Defensible under scrutiny from a QofE firm
• Conservative rather than aggressive — credibility on small items builds trust for larger ones

Revenue Quality Analysis

Segment your revenue in ways that highlight quality:

• Recurring vs. non-recurring
• Revenue by customer with concentration analysis
• Revenue by service line or product
• Revenue by geography
• New vs. existing customer revenue
• Contract vs. at-will revenue

Growth Narrative

Articulate your growth trajectory and the drivers behind it. What's organic vs. acquired? What investments are driving growth? What's the realistic growth runway under new ownership?

Trailing Twelve Months (TTM)

If your most recent full year doesn't tell the full story (e.g., you've had strong recent growth), lead with TTM financials to show the current run rate.

Build Your Data Room Before Going to Market

A well-organized data room signals professionalism and accelerates diligence. Organize it before a single buyer sees your business:

Financial: Tax returns, P&Ls, balance sheets, AR/AP aging, add-back schedules, revenue detail, bank statements Legal: Corporate documents, contracts, leases, IP, litigation, licenses Operations: Org chart, employee roster, SOPs, technology, insurance Sales: Customer list, pipeline, marketing spend, CAC/LTV data Compliance: Regulatory filings, environmental, employment

Index everything and make it easily navigable. Buyers who can find what they need move faster and with more confidence.

Create a Confidential Information Memorandum (CIM)

The CIM (also called an Offering Memorandum) is the primary marketing document for your business. It typically includes:

• Executive summary — the investment thesis in 2-3 pages
• Business overview — history, services/products, competitive advantages
• Market analysis — industry trends, market size, competitive landscape
• Financial performance — historical and projected financials with analysis
• Growth opportunities — actionable opportunities a new owner can pursue
• Management and employees — team overview and organizational structure
• Facility and operations — physical assets and operational infrastructure
• Transaction overview — what's being sold, deal structure preferences, timeline

Your M&A advisor typically prepares the CIM, but you should be deeply involved in the content. The CIM sets buyer expectations and frames every subsequent conversation.

Manage a Competitive Process

The single most effective way to maximize your sale price is to create competitive tension among multiple qualified buyers. Here's how:

Targeted Outreach

Your advisor should identify 50-200+ potential buyers across categories — strategic acquirers, PE firms, family offices, individual buyers, search funds. The outreach should be confidential and systematic.

Structured Timeline

Run buyers through a disciplined process:

1. Teaser / NDA — anonymous business summary, followed by NDA execution
2. CIM distribution — full business overview to NDA'd buyers
3. Management presentations — meetings with serious buyers (typically 5-15)
4. LOI submission deadline — all interested buyers submit offers by the same date
5. LOI selection and negotiation — evaluate offers, negotiate with top candidates
6. Exclusivity and due diligence — sign LOI with selected buyer
7. Definitive agreement and close

Creating Leverage

Multiple offers create leverage. Even if one buyer is the clear frontrunner, having alternatives gives you negotiating power on price, terms, and structure. The worst negotiating position is having a single buyer who knows they're the only option.

Managing Buyer Expectations

Set clear expectations about timeline, process milestones, and what you're looking for in a buyer. Professional buyers respect a well-run process — they deal with them regularly.

Operational Preparation

Reduce Owner Dependence

If you haven't already, start delegating aggressively. The business should be able to run without you for weeks at a time before you go to market. This isn't just about valuation — the sale process itself will consume significant time and attention.

Lock In Key Employees

Identify the 3-5 employees who are critical to the business's value. Implement retention strategies before going to market:

• Stay bonuses triggered at closing
• Employment agreements with reasonable terms
• Equity or phantom equity programs (structured carefully to avoid complications)

Maintain Performance

This is counterintuitive but critical: the sale process is long and distracting. Many sellers take their foot off the gas, and business performance suffers. Declining performance during a sale process is the most common reason deals get repriced or die.

Maintain your sales pipeline, keep investing in the business, and don't defer decisions. Buyers are evaluating real-time performance alongside historical results.

Clean Up Loose Ends

• Resolve any pending legal disputes
• Renew key contracts that are expiring
• Update licenses and permits
• Address deferred maintenance
• Formalize any informal arrangements (handshake deals with customers, verbal employment agreements)

Timing Your Exit

The best time to sell is when:

• Business performance is strong — growing revenue and EBITDA
• The industry is favorable — active buyer demand, strong multiples
• You're not burned out — sellers who are exhausted make worse decisions
• Personal circumstances align — your next chapter is clear

The worst time to sell is when you're forced to — health issues, partner disputes, financial pressure. These situations limit your leverage and compress your timeline.

Start planning 2-3 years before your target exit date. The earlier you begin, the more time you have to address issues, build value, and choose the right moment.

The Bottom Line

A well-prepared, professionally run sale process consistently produces better outcomes than ad hoc approaches. The investment in preparation — financial, operational, and strategic — pays for itself many times over.

If you're thinking about an exit in the next 1-3 years and want to start planning, let's have a confidential conversation about where you are and what needs to happen.