When I speak to business owners about selling their business, the most common phrase I hear is: 

“I wish I’d started preparing years ago.”

And I completely understand why. When you’re running a business, you’re focused on customers, staff problems, cash flow, and the day-to-day firefighting that never seems to end. Thinking about an eventual sale often feels miles away, until suddenly it isn’t.

But here’s the uncomfortable truth: businesses don’t become valuable at the point you decide to sell them. They become valuable in the years leading up to that moment. And the owners who achieve the highest valuations are the ones who treat “sale readiness” as a long-term strategic project, not a last-minute scramble.

I’ve seen both sides of this.

I once worked with a business owner who built a fantastic company, but everything depended on him. He was the best salesperson, lead problem-solver, the one customers demanded to speak to… and the one making all the key decisions. 

When he finally wanted to sell, the business was profitable, but buyers saw one massive red flag: remove the owner, and the business collapses. His valuation suffered because of it.

On the other end of the spectrum, I worked with a small engineering company that had systems, processes, and a capable second-in-command. The owner gradually stepped back from day-to-day operations two years before selling. 

When buyers evaluated the business, they saw something rare: a business that could run without its founder. The final sale price was significantly above market expectation, not because the business was bigger, but because it was less risky.

These two examples highlight a simple truth: “Buyers don’t pay for what your business is today; they pay for what it will continue to produce without you.”

That’s why preparing your business for sale should start with a clear picture of what your business is worth right now. Whether you use SDE or EBITDA, your initial valuation gives you the baseline. From there, you can identify the gaps, build a plan, reduce your involvement, tighten up profitability, and increase the final sale price, sometimes dramatically.

This blog will walk you through exactly how to do that:

• How to measure where you are today
• How to understand what drives (and destroys) value
• How to set a target valuation
• And how to build a clear, actionable plan to get your business truly “sale-ready”

If you’re even thinking about selling in the next three to five years, start now. Your future buyer will thank you, and so will your bank balance.

Step 1: Get Your Baseline Valuation (SDE or EBITDA).

Before you can prepare your business for sale, you need to know exactly where you’re starting from. I often describe valuation as the sat-nav of the exit planning process, because just like a sat-nav, you can’t map out a route until you first identify your current position.

Most owners guess what their business is worth. They pick a number out of the air, usually based on what someone else sold their business for, or a figure they “feel” their business deserves. The problem is that feelings don’t sell businesses. Numbers do. And not just any numbers, normalised, adjusted, and industry-appropriate numbers.

This is where SDE and EBITDA come in.

When to Use SDE (Seller’s Discretionary Earnings).

SDE is typically used for smaller, owner-operated businesses where the owner plays an active daily role. This method removes distortions by adding back the owner’s salary, personal benefits hidden in the business, and one-off expenses. If you’re heavily involved in the day-to-day, SDE gives the truest picture of what a buyer is actually purchasing:

➡️ A stream of cash that the new owner could take over.

For example, a self-managed plumbing business may only show a modest net profit on paper. But once you add back the owner’s wages, vehicle lease, mobile phone, and one-time expenses, the “real” earning power of the business becomes much more attractive.

That’s why I always encourage owners in this category to start with the SDE calculator. It gives you a clean number that reflects the true financial performance, without the noise.

When to Use EBITDA (Earnings Before Interest, Tax, Depreciation & Amortisation).

EBITDA is used for more established businesses, typically those:

 ✔ With management teams
✔ With systems in place
✔ Where the owner is not essential to daily operations
✔ With revenues high enough that buyers look at the business as an investment rather than a job

EBITDA strips the financials back to operational performance. It shows buyers how profitable the business is without your personal income, personal expenses, or financing decisions muddying the water.

For example, a manufacturing business with £2m–£5m in annual turnover will almost always be valued using EBITDA because buyers want to know how efficiently the business runs as a machine, independent of the owner.

If this sounds like your setup, the EBITDA calculator will give you a clearer starting point.

Why This Step Matters So Much.

Your baseline valuation isn’t just a number you use when selling, it’s the benchmark for every improvement you’ll make over the coming years.

Once you know:

• What is your business worth today
• What causes that valuation
• and how buyers will view your numbers

…you can begin shaping the business in a way that increases its value predictably and sustainably.

A surprising number of owners skip this step and jump straight into “improving the business.” But without knowing your starting point, you may focus on the wrong things. For example:

• You might obsess over marketing when what buyers really want is reduced owner involvement.
• You might try to cut costs when the bigger win is improving your pricing strategy.
• You might delay hiring a manager when that single hire could increase your sale multiple by 20–40%.

Your valuation is the lens through which you’ll prioritise every improvement from this point forward. So before you do anything else, run your numbers. Use the SDE calculator or the EBITDA calculator, whichever fits your business model, and get a clear, honest, and accurate valuation. Because once you know where you are, we can start building the path to where you want to be.

Step 2: Understand What Your Valuation Is Really Telling You.

Once you’ve run either the SDE or EBITDA calculator, you’ll end up with a number. But that number is only half the story. Your valuation is a diagnostic tool.
Just like a blood test, it doesn’t just tell you where you are; it tells you what’s strong, what’s weak, and what needs improvement before you sell.

Buyers interpret your numbers very differently from how most owners interpret them. Owners see revenue, profit, and potential. Buyers see risk, dependency, and future earnings stability. So in this section, we break down what your valuation method is really showing you, and more importantly, what a buyer will read between the lines.

2.1 If You Used the SDE Method.

SDE is used for owner-operated businesses, so the number tells us three important things:

2.1.1. Your Business Is Currently Dependent on You.

If your valuation is based on SDE, the buyer instantly knows:

• You work in the business
• You likely wear multiple hats
• A new owner will need to replace you or replicate you

That’s not a criticism, it’s normal. But it also means owner dependency is likely your biggest value destroyer. For example:

A joinery business generating £120k SDE might initially look attractive. But if the owner handles quotes, production scheduling, key customer relationships, and quality checks, buyers will discount the valuation because too much leaves with the owner.

The good news? Reducing owner dependency is one of the strongest ways to increase valuation.

2.1.2. Your Add-Backs Reveal Your Business Cleanliness

In SDE, we adjust for:

• Personal expenses through the business
• One-time costs
• Owner benefits
• Non-core activities

The more add-backs you have, the more buyers will wonder:

• “Why are so many personal costs in the business?”
• “Are these numbers trustworthy?”
• “How much work do I need to do to normalise the accounts?”

A business with clear, clean financials always sells faster and for more money.

2.1.3. SDE Highlights the Real Cashflow Buyers Will Inherit.

Buyers focus on: “What will I earn if I take this business over?” SDE gives them their answer.

If your SDE is healthy, but you’re overworked, stressed, or firefighting constantly, the valuation tells you that your biggest opportunity is structural, not financial:

➡️ You must remove yourself from operations to increase your multiple.

2.2 If You Used the EBITDA Method.

EBITDA is used for more mature businesses and reveals a different set of insights:

2.2.1. Buyers Care About the Efficiency of the Business, Not You

EBITDA strips out anything personal and focuses exclusively on operational performance.

This means buyers will evaluate:

• Gross margins
• Cost control
• Process efficiency
• Workforce productivity
• Scalability

For example, a digital agency with £350k EBITDA looks attractive on paper, but if margins are shrinking or project delivery is inconsistent, the buyer will discount the future earnings risk.

2.2.2. EBITDA Immediately Highlights Your Sector and Risk Profile.

Buyers use multiples, and these multiples reflect:

• Industry stability
• Competition
• Growth potential
• Perceived risk
• Management depth

A business with £500k EBITDA in a stable, recurring-revenue sector may command a 4× or even 5× multiple. The same earnings in a volatile sector may only achieve 2×. Your EBITDA result tells you exactly where you sit on this spectrum.

2.2.3. EBITDA Shows How Well Your Business Runs Without You.

Even in EBITDA-based valuations, owner involvement still matters.

If the business depends on:

• Your relationships
• Your industry knowledge
• Your technical skills
• Your personal leadership

… it reduces your multiple, even if EBITDA is strong.

For example, A manufacturing company with strong EBITDA but no documented processes and a single point of failure (you) will face buyer resistance because the future earnings feel fragile.

Why Understanding Your Valuation Matters.

Your valuation doesn’t just tell you “this is what your business is worth.” It tells you:

• Whether your business looks risky or reliable
• Whether your financials appear clean or messy
• Whether your role is a problem or an asset
• Whether your margins suggest strength or weakness
• Whether your future earnings look stable or uncertain
• Whether your eventual multiple will be high or low

And this understanding becomes the foundation for Step 3: Identifying your value gaps, so you know exactly where to focus your improvement efforts.

Step 3: Identify the Value Gaps.

Your valuation (SDE or EBITDA) tells you where you are today. Now the question becomes: What’s stopping your business from being worth more?

Every business has value gaps, areas where risk, inefficiency, or owner involvement drag the valuation down. The good news is that these gaps are almost always fixable. And when you fix them, the impact on your final sale price is often dramatic.

We’re going to look at the five main categories buyers focus on. As you read through these, be honest with yourself; these are the exact areas where improvements can add hundreds of thousands of pounds (or more) to a sale price.

3.1 Owner Dependency: The Number One Value Killer.

Buyers hate uncertainty, and nothing screams “risk” louder than a business that collapses without its owner.

Owner dependency shows up when:

• You’re the main salesperson
• Customers want you personally
• You handle the most technical work
• You make most of the decisions
• The team relies on you to solve problems
• You’re logged in on every system and approving everything

If the business needs you, buyers see the worst-case scenario:

➡️ “When the owner leaves, the value leaves too.”

Real example:
A construction firm I advised had £900k SDE, which should have generated a very attractive valuation. But the owner was involved in pricing every job, managing every subcontractor, and signing off every invoice. Buyers immediately discounted the valuation because the business didn’t look like it could run without him.

Contrast that with a manufacturing business where the owner transitioned into a strategic advisory role 18 months before selling. With a competent GM in place, documented processes, and delegated decision-making, the multiple increased significantly.

Reducing owner dependency is one of the fastest ways to boost valuation.

3.2 Profitability & Efficiency: The Hidden Goldmine.

Increasing net profit doesn’t increase value pound for pound; it increases value multiple for pound. If your business sells at 3× SDE or 4× EBITDA, then every £10,000 increase in profit could increase your valuation by £30,000–£40,000.

Improving profitability usually comes from:

• Better pricing (your pricing audit ties in perfectly here)
• Improved gross margins
• Process efficiency
• Reduced waste or rework
• Eliminating unprofitable product lines
• Automation
• Better staff utilisation
• Reducing unnecessary overheads

Real example:
A service business increased its EBITDA by £70k simply by restructuring team roles and improving project scheduling. At a 4× multiple, that added £280k to the valuation, without increasing sales at all. Most owners think the only way to boost valuation is to grow revenue. Wrong. Often, the biggest gains come from running the business better, not making it bigger.

3.3 Customer Base Quality: Where Predictability Meets Value

Buyers don’t just want profit; they want predictable profit. They examine:

✔ Revenue concentration

If 40% of your revenue comes from one customer, your valuation drops because losing that client would be catastrophic.

✔ Recurring vs. one-off revenue

Businesses with monthly contracts, service plans, or subscription-like income are valued higher because the earnings are stable.

✔ Customer churn

High turnover means high risk.

✔ Contract strength

Are your customers on written agreements or informal arrangements?

Real example:
Two IT companies had identical EBITDA, but one had 80% recurring contract revenue, while the other relied heavily on project work. The recurring-revenue business achieved nearly double the multiple. Predictability is the buyer’s dream, and high predictability makes your valuation climb.

3.4 Financial Cleanliness: Clean Books = Higher Offers

Buyers want clarity. If your accounts are messy, inconsistent, behind schedule, or hard to understand, your valuation takes a hit. Signs of poor financial cleanliness:

• Mixing personal and business expenses
• Late filing
• Inconsistent bookkeeping
• Missing documentation for add-backs
• Cash jobs or unrecorded income
• Complicated share structures
• Large, unexplained fluctuations in costs or revenue

When buyers can’t trust the numbers, they assume the worst.

Real example:
I’ve seen deals delayed or reduced simply because the seller needed months to clean up bookkeeping. One sale even collapsed because the financials were so disorganised that the buyer lost confidence entirely. Clean numbers build trust, and trust builds valuation.

3.5 Operational & Strategic Risk: The Silent Multiple Reducer

Risk reduces multiples. Simple. Buyers will examine:

✔ Supply chain stability

Are you reliant on one supplier?

✔ Key person risk

Does one staff member hold essential skills?

✔ Compliance or regulatory issues

Outstanding issues reduce confidence.

✔ Market position

Are you a leader… or a “me too” business struggling to differentiate?

✔ Systems and processes

A business with documented SOPs sells for more than one that runs on tacit knowledge.

✔ Brand strength

A weak brand increases risk and reduces perceived value.

Real example:
A professional services business with strong EBITDA achieved a surprisingly low multiple because all expertise sat with two senior staff who weren’t staying post-sale. No processes were documented. The buyer saw uncertainty, and uncertainty kills deals.

Why Identifying Value Gaps Matters

These value gaps become your roadmap. Your business doesn’t need to be perfect to sell, but it does need to look predictable, transferable, and profitable without you at the centre. Once you identify your gaps, you’re ready for the next step:

➡️ Setting Your Target Valuation
… and building a clear plan to bridge the gap between where you are today and where you want to be.

Step 4: Set Your Target Valuation.

Once you know your current valuation and the value gaps holding you back, the next step is simple but powerful: decide what you want your business to be worth when you eventually sell it.

Most owners skip this step entirely. They focus on “growing the business” without ever defining the number that actually matters, the eventual sale price. But without a target valuation, you have no way of prioritising your improvements or measuring your progress.

I always encourage owners to approach this like any other strategic goal:

➡️ Be specific.
➡️ Be realistic.
➡️ Be ambitious.

Your target valuation becomes the anchor for your exit strategy. It clarifies what needs to happen, where you should invest time and money, and what actions will deliver the biggest return.

4.1 Start With Your Current Valuation (Baseline).

Using either the SDE or EBITDA calculator, you now know:

• Your current adjusted earnings
• Your current sector multiple (or estimated range)
• Your approximate valuation

This gives you the starting point for your journey.

For example:

• Current SDE: £250,000
• Sector multiple: 2.8×
• Current valuation: £700,000

Or:

• Current EBITDA: £600,000
• Multiple: 4×
• Current valuation: £2.4 million

This is where you stand today, warts and all.

4.2 Define Your Desired Sale Price.

Now ask yourself a simple question:

“What do I want this business to be worth when I sell it?”

Some owners want to double or triple the value. Others want to create a life-changing exit. Some simply want the financial security to retire comfortably. Your target valuation should reflect:

• Your personal financial goals
• Your exit timeline
• Your appetite for business improvements
• The realistic potential of your sector

And most importantly:

➡️ The value gaps you’re willing to close

For example:

• “I want to sell for £1.5m within the next 4 years.”
• “I want my business to be worth £5m before I turn 60.”
• “I want to increase the valuation enough to retire mortgage-free.”

4.3 Reverse-Engineer the Numbers.

Once you know the target, you calculate the difference between your current valuation and your desired one.

Example 1: SDE business

• Current SDE: £200,000
• Current multiple: 2.5×
• Current valuation: £500,000
• Target sale price: £1,000,000

To get there, you can either:

Increase SDE:
A rise from £200k to £300k increases value from £500k to £750k (at a 2.5× multiple).

Increase the multiple:
By reducing owner involvement and cleaning operations, a multiple increase from 2.5× to 3.3× can get you to £1m without touching revenue.

Best scenario: Do both, increase SDE to £250k and improve the multiple to 4× = £1,000,000 valuation.

Example 2: EBITDA business

• Current EBITDA: £600,000
• Current valuation (4×): £2.4m
• Target valuation: £4m

Option A: Improve EBITDA to £800k
EBITDA of £800k at 4× = £3.2m

Option B: Improve the multiple to 5×
£600k × 5 = £3m

Option C: Improve both
EBITDA of £700k × 5.5 = £3.85m
Add some strategic positioning, and you’re over the £4m mark.

4.4 Set a Timeline.

Valuation improvement doesn’t happen overnight. You should set a clear timeframe based on:

• Your exit goal (3 years? 5 years?)
• The complexity of the improvements needed
• The size of your business
• Your capacity to delegate and systemise

Most value-building projects fit into a 2–5 year timeframe, though I’ve seen owners make huge progress in as little as 12–18 months when they commit fully.

4.5 Identify the “Levers” That Will Have the Biggest Impact.

Your target valuation should narrow your focus to the highest-impact activities. Depending on your business model, this might include:

✔ Strengthening your management team

To increase your sale multiple

✔ Improving margins or pricing

To boost SDE or EBITDA quickly

✔ Cleaning up the financials

To reduce buyer discounting during due diligence

✔ Building recurring or contract-based revenue

To increase predictability and future earnings

✔ Documenting processes and systems

To reduce reliance on you and increase buyer confidence

✔ Diversifying your customer base

To reduce concentration risk

✔ Streamlining operations

To boost profitability without needing to scale headcount. Your valuation target tells you which improvements will produce the best return, and which aren’t worth your attention.

4.6 Why Setting a Target Valuation Changes Everything.

When you know what your business is worth today and what you want it to be worth, something powerful happens:

1. You stop working aimlessly and start working strategically.
2. You prioritise the improvements that move the needle.
3. You avoid wasting years chasing revenue that doesn’t improve valuation.
4. You can see tangible progress every quarter.
5. You start running the business like the future buyer already owns it.

A target valuation transforms exit planning from a vague intention into a clear, actionable roadmap. And once your target is set, you can move to the next step:

➡️ Building Your Value-Improvement Plan.

The practical actions that will close the gap and increase your sale price.

Step 5: Build Your Value-Improvement Plan.

With your target valuation defined, you now need a practical, systematic plan to close the gap between where you are today and where you want to exit. This is where valuation theory becomes an actionable strategy. The goal isn’t to make your business “perfect” it’s to make it more profitable, less risky, and less dependent on you, because those are the three things that materially increase your sale price.

The smartest way to approach this is to break your plan into four improvement categories:

1. Financial Improvements
2. Operational Improvements
3. Strategic Improvements
4. Risk Reduction

Each category plays a role in increasing either your SDE, your EBITDA, or your exit multiple. Let’s walk through them one by one.

5.1 Financial Improvements: Increase Profits, Increase Valuation

In value-building terms, profit improvements are the quickest wins. Why? Because every extra £1 of profit is multiplied when you sell.

If your business sells for 3× SDE or 4× EBITDA:

• £50,000 added profit = £150k–£200k added to valuation
• £100,000 added profit = £300k–£400k added to valuation

Business owners often underestimate just how powerful these improvements can be.

Where to start:

✔ Improve your pricing (the #1 fastest value lever)

Most small businesses underprice. A pricing audit can often uncover:

• Margin leaks
• Underperforming products
• Opportunities to reposition
• Areas where customers will pay more

Even a 5–10% price increase can transform profitability without increasing overheads.

✔ Improve Gross Margin

Look at:

• Supplier renegotiations
• Waste reduction
• Better scheduling or workflow management
• Reducing discounts
• Eliminating low-margin products/services

✔ Remove unnecessary costs

You’d be amazed at how many businesses leak cash through:

• Unused subscriptions
• Inefficient staffing patterns
• Poor inventory control
• “Owner lifestyle” costs that are baked into overheads

✔ Normalise the financials

Buyers want clarity. Work with an accountant to:

• Clean up the P&L
• Separate personal costs
• Document add-backs
• Smooth out anomalies

A clean financial story = a higher valuation and a smoother sale.

5.2 Operational Improvements: Make the Business Run Without You.

Operational improvements are usually where valuation multiples increase the most. This is where you turn the business from “owner-driven” into “system-driven.” If you can remove yourself from daily operations, buyers will pay significantly more.

Where to focus:

✔ Document processes and systems

You should aim to create:

• Workflow SOPs
• Sales processes
• Customer service scripts
• Production checklists
• Administrative procedures

A business that runs on systems sells for far more than one that runs on tribal knowledge.

✔ Build a second layer of management

This can be:

• A general manager
• A strong operations lead
• A senior technical specialist
• A project manager
• A finance manager

Even part-time leadership can boost your valuation by reducing dependency on you.

✔ Delegate decision-making

If everything comes across your desk, you are the bottleneck, and buyers see that as a risk.

✔ Improve operational efficiency

Consider:

• Better scheduling
• Workflow automation
• Time tracking
• CRM or ERP tools
• Project management systems

Efficiency improvements usually increase both profit and buyer confidence.

5.3 Strategic Improvements: Position the Business for Maximum Appeal.

Strategic improvements don’t just improve financials; they improve future attractiveness.

Buyers think long-term. They evaluate:

• Market position
• Competitive advantage
• Revenue predictability
• Growth potential

If your strategy is strong, your valuation multiple increases because the business looks scalable and less risky.

Where to focus strategically:

✔ Strengthen your differentiator

A business that blends into its sector sells for a weaker multiple. A business with a clear value proposition commands attention and stronger offers.

✔ Build recurring or contract-based revenue

Predictable income is a valuation supercharger.

Examples:

• Maintenance plans
• Service contracts
• Retainer agreements
• Subscription-style models
• Long-term frameworks or supply agreements

Even converting 20–30% of revenue to recurring can transform your multiple.

✔ Diversify revenue streams

If one product or service dominates your P&L, your valuation becomes vulnerable.

✔ Improve brand strength and online presence

A strong brand tells buyers:

• Customers trust you
• You are positioned professionally
• The business is well-established
• Future growth feels secure

This is one of the most underrated value levers.

5.4 Risk Reduction: Remove Buyer Anxiety, Increase Your Multiple.

Buyers do not pay top prices for businesses that feel fragile. Reducing risk directly increases your valuation multiple because it makes future earnings more secure.

The key risks to address:

✔ Customer concentration risk

No single client should account for more than 15–20% of revenue.

✔ Supplier dependency

If you rely on one provider, resolve this now.

✔ Key person risk

If one employee holds specialist knowledge, cross-train and document.

✔ Compliance and regulatory obligations

Fix any outstanding issues before a buyer discovers them.

✔ System security and data protection

A clean GDPR and cybersecurity posture builds credibility.

✔ Operational robustness

• Disaster recovery
• Contingency planning
• Insurance adequacy

✔ Legal housekeeping

Make sure you have:

• Updated customer contracts
• Clean employment contracts
• Clear shareholder agreements
• IP properly protected
• No unresolved disputes

The fewer risks a buyer sees, the higher the multiple they are willing to pay.

Why This Plan Matters.

A buyer doesn’t purchase your past; they purchase your future earnings. Your value-improvement plan shows them that the business is:

• Profitable
• Systemised
• Stable
• Scalable
• Transferable
• Low-risk
• No longer dependent on you

This combination leads to higher offers, faster sales, and fewer price reductions during due diligence. Your plan becomes the bridge between your current valuation and your target valuation.

Step 6: Prepare Your Due Diligence Pack.

If increasing your valuation is about making your business more attractive, due diligence is about proving it. This is the stage where buyers dig into every part of the business to confirm that what you’ve told them is accurate, reliable, and low risk.

Most deals don’t fall apart because the business is bad. Most deals fall apart because documentation is bad, financials are unclear, or the seller cannot provide what the buyer needs. Preparing a Due Diligence Pack early (months or even years before you sell) can dramatically increase:

• Buyer confidence
• Your valuation multiple
• The speed of the sale
• The quality of offers you receive

Think of this pack as your “exit audit file.” The more complete and organised it is, the fewer opportunities buyers have to chip away at your asking price.

6.1 Why Preparing Early Matters.

When you prepare your due diligence long before the sale:

• You catch problems before buyers find them
• You clean up your financials and paperwork
• You look more professional and trustworthy
• You appear ready for sale, which strengthens your negotiation position
• You avoid last-minute panic, delays, and red flags

I’ve seen owners lose tens of thousands simply because they weren’t able to produce the right paperwork quickly. Buyers assumed risk and lowered their offers accordingly.

Early preparation protects your valuation.

6.2 The Core Components of a Due Diligence Pack.

Buyers typically want information in four major categories:

1. Financial
2. Legal
3. Commercial
4. Operational

Let’s break these down into simple, actionable steps.

A. Financial Documentation (The Most Critical Section).

This is where buyers spend most of their time. They want to confirm earnings, understand margins, and assess the stability of the business.

You should prepare:

✔ 3–5 years of financial statements

• Profit & Loss
• Balance Sheets
• Cashflow statements

Make sure these match your tax returns; consistency builds trust.

✔ Management accounts for the current year

Buyers want up-to-date numbers, not accounts from nine months ago.

✔ Breakdown of SDE or EBITDA calculations

• Add-backs clearly listed
• One-off expenses explained
• Owner-related costs documented

✔ Aged receivables and payables reports

Shows how well customers pay and whether liabilities are managed.

✔ VAT returns, PAYE records, and tax filings

Buyers want to ensure there are no hidden tax issues.

✔ Debt schedule

If you have loans, leases, or finance agreements, detail them clearly.

✔ Inventory reports (if relevant)

Accurate stock values, no guesswork.

Rule: If the numbers are unclear, buyers assume the worst and reduce their offer.

B. Legal Documentation (Remove Red Flags Before They Appear)

Legal issues can stall or kill a deal faster than anything else.

You’ll need:

✔ Contracts with customers

• Current agreements
• Renewal terms
• Pricing arrangements

✔ Supplier contracts

Especially where you rely heavily on one provider.

✔ Employment documentation

• Contracts
• Policies
• Job descriptions
• Redundancy or disciplinary history (if relevant)

✔ Intellectual property paperwork

• Trademarks
• Copyright
• Patents
• Licensing agreements

✔ Any outstanding legal issues

• Court cases
• Disputes
• Claims
• Compliance concerns

Get these resolved before going to market wherever possible.

C. Commercial Documentation (Buyers Want to Understand the Business Model)

Buyers want clarity on what actually makes the business work.

Prepare:

✔ Business model overview

• How you generate revenue
• Key products and services
• Customer types
• Pricing structure

✔ Sales pipeline

Future contracts, quotes issued, and the probability of closing deals.

✔ Customer segmentation

• Recurring vs. one-off customers
• Top 10 customers and % of revenue
• Churn rate

✔ Marketing assets

• Website
• Sales materials
• Lead generation processes

✔ Competitor overview

Shows you understand your place in the market.

D. Operational Documentation (Shows the Business Is Transferable).

This section is crucial for increasing your multiple. It shows that the business runs smoothly—and can run without you. Prepare:

✔ SOPs (Standard Operating Procedures)

• Production
• Sales
• Service delivery
• Administration
• Quality control
• Finance processes

✔ Organisational chart

Shows structure, roles, and responsibilities.

✔ Key performance indicators (KPIs)

Buyers love data. It shows discipline, predictability, and operational maturity.

✔ Equipment list (if applicable)

Age, condition, maintenance schedules.

✔ IT systems and software stack documentation

• CRMs
• Accounting software
• Project management tools
• Passwords stored securely

✔ Health & Safety compliance

• Training records
• Risk assessments
• Certificates

6.3 Typical Buyer Red Flags You Must Avoid.

A buyer will discount your price if they find:

• Weak or inconsistent financial records
• A high concentration of revenue with one customer
• No documented processes
• No second-tier management
• Overdue tax filings
• Hidden liabilities
• Outstanding legal disputes
• Poor employee contracts
• Unclear ownership of IP
• Outdated or unsafe equipment
• Overreliance on the owner

Your goal is to eliminate as many red flags as possible before going to market.

6.4 Build a Digital Due Diligence Folder.

Organise everything into a clear, well-labelled digital folder structure.  Buyers will often request access during the sale process, so prepare it now.

Suggested structure:

Due Diligence Pack:

1. Financial

Accounts (5 years)

Management Accounts

SDE or EBITDA Calculations

Tax Returns

Payroll

Debtors & Creditors

Forecasts

2. Legal

Customer Contracts

Supplier Contracts

IP Documents

Employee Contracts

Legal Issues

3. Commercial

Business Model Overview

Customer Data

Recurring Revenue

Marketing Materials

Competitor Analysis

4. Operations

SOPs

Org Chart

KPIs

IT & Systems

Equipment List

Health & Safety

A structured, professional folder says something powerful: “This business is ready for sale.”

Why This Matters.

Due diligence is where deals often go wrong.  But if you prepare early:

• Buyers trust you more
• You maintain leverage during negotiation
• You protect your valuation
• You avoid last-minute stress
• You keep the process moving smoothly
• You reduce the risk of buyers walking away

A complete Due Diligence Pack is one of the strongest signals of a well-run, high-value business.

Step 7: Make Your Business “Sale Ready”.

Once your valuation is clear, your value gaps are identified, and your due diligence pack is prepared, the next step is to “dress the business for sale.” This is the stage where you take all the improvements you’ve made and present them in a way that is attractive, professional, and confidence-inspiring. Think of it like preparing a house for the market: you’ve done the repairs, now it’s time to stage it so buyers see its full value.

A sale-ready business has five characteristics:

1. It looks clean and well-run
2. It shows predictable, growing earnings
3. It runs without the owner
4. It feels low-risk to a buyer
5. It has a compelling story

Let’s break each of these down into actionable steps.

7.1 Polish the Financials.

By the time you go to market, your financials should be:

• Accurate
• Up to date
• Clean
• Easy to understand
• Supported by documentation

Make sure you:

✔ Finalise any old accounts
✔ Reconcile all bank and credit accounts
✔ Remove personal expenses from the business
✔ Document all add-backs clearly
✔ Ensure margins and costs are trending correctly
✔ Provide forecasts that show stability and growth

Why this matters: Clean numbers increase trust, and trust increases your valuation multiple.

7.2 Strengthen Customer Contracts and Revenue Predictability.

Buyers want certainty. Certainty comes from:

• Recurring revenue
• Long-term agreements
• Framework contracts
• Maintenance plans
• Retainers
• Subscription-like offerings

Even if you can’t fully convert your model to recurring revenue, you can make your earnings more predictable by:

✔ Formalising customer agreements
✔ Using 12-month rolling contracts
✔ Offering service packages
✔ Introducing minimum terms
✔ Incentivising renewals

Example:
A business with £1m revenue and only 10% recurring income might be valued at 3× earnings.
Increase recurring revenue to 40%, and the multiple could rise to 4× or even 5×, without changing profit.

7.3 Refresh Your Online Presence and Brand.

This is often overlooked, but it makes a huge difference. Buyers absolutely will check your digital footprint, and in many cases, your online presence becomes their first impression.

You should check and update:

✔ Website (modern, clear, well-designed)
✔ Google reviews
✔ LinkedIn company page
✔ Social media presence
✔ Marketing materials
✔ Case studies and testimonials

A strong brand tells buyers:

• You are credible
• The business is professionally run
• Customers trust you
• The business will be easy to continue growing

Remember: Buyers aren’t just evaluating the business. They’re evaluating how easy it will be to sell the business to customers once you’re gone.

7.4 Strengthen Your Management Team & Delegation Systems.

If you want top valuation, your business must operate without you. This is non-negotiable.

Make sure:

✔ You have at least one capable second-in-command
✔ Responsibilities are clearly delegated
✔ Team members understand their roles
✔ Decision-making is decentralised
✔ Staff can handle customer issues without involving you
✔ Processes run smoothly even when you’re not there

If everything depends on you, buyers see risk. If almost nothing depends on you, buyers see opportunity.

7.5 Resolve Issues Before Buyers Spot Them.

Any unresolved operational, legal, financial, or HR issue will:

• Slow the sale
• Reduce the valuation
• Invite more scrutiny
• Increase buyer anxiety
• Lead to a lower offer or renegotiation

Before you hit the market, clean up:

✔ Outstanding tax issues
✔ Employment disputes
✔ Outdated or missing contracts
✔ Supplier disagreements
✔ Health & safety concerns
✔ Insurance gaps
✔ Aged debtors that need chasing
✔ Any key-person risk in your team

Rule: Buyers always assume unresolved issues are worse than they appear.

7.6 Improve “Transferability”.

Transferability means: How easy will it be for a new owner to run this business successfully? You can improve transferability by:

✔ Documenting every core process

Sales → Delivery → Billing → Customer care
SOPs → Checklists → Flowcharts → Templates

✔ Creating a clear handover plan

• Training schedule
• Key introductions
• Access and passwords
• Transition period timelines
• Support the new owner during the first 3–6 months

✔ Building a strong culture

A well-run, stable team is a huge selling point.

✔ Highlighting opportunities for growth

Buyers love untapped potential. Show what you haven’t done yet that they could do next.

7.7 Prepare Your “Business Sale Story”

You’re not just selling a business.
You’re selling a narrative:

• The history
• The journey
• The growth
• The stability
• The future potential
• The reasons you are exiting

Buyers want to believe they’re buying a business with momentum. Your story should answer:

• Why now?
• What makes your business special?
• Why will it continue to thrive?
• What opportunities can the buyer unlock?

A compelling story strengthens your negotiating position and creates emotional investment from the buyer.

7.8 Final Pre-Market Checklist.

Before officially preparing to sell, make sure you can tick off:

• Clean financials ready for inspection
• Recurring revenue or predictable income strengthened
• Customer contracts updated
• SOPs and processes documented
• Delegated management structure in place
• No unresolved legal or HR issues
• Website refreshed and brand polished
• Key risks identified and mitigated
• Due diligence folder complete
• Clear growth opportunities outlined
• Transition plan mapped out
• Owner’s role reduced to a strategic minimum

Why Sale-Readiness Matters So Much.

Most business owners think valuation is all about numbers. But in reality:

Numbers get you a foot in the door → Presentation gets you your price → Confidence from the buyer gets you your multiple.

A sale-ready business:

• Attracts more buyers
• Sells faster
• Receives stronger offers
• Faces fewer negotiation challenges
• Avoids price reductions
• Maximises the owner’s exit value

This is where all the preparation you’ve done comes together to create real, tangible financial results at the point of sale.

8. Final Word: The Best Time to Start Is Now.

If there’s one lesson I’ve learned working with business owners over the years, it’s this:

“The value of your business is not determined when you sell it; it’s determined in the years before you sell it.”

Too many owners wake up one day deciding it’s time to exit… only to realise they should have started preparing far earlier. They discover gaps in their financials, weaknesses in their operations, missing contracts, overreliance on themselves, and profit opportunities left untouched. By then, the valuation is what it is, and there’s little time left to influence it.

But you’re reading this now, which means you’re already doing something that most owners never do: you’re preparing with intention.

Whether your exit is three years away or ten, the steps you’ve just worked through will transform your business:

• You’ve valued your business properly using SDE or EBITDA.
• You understand exactly what drives your valuation up and what drags it down.
• You’ve identified the gaps that are holding back your sale price.
• You’ve set a target valuation that aligns with your financial future.
• You’ve built a strategic improvement plan that boosts both profitability and your multiple.
• You’ve created a due diligence pack that signals professionalism and confidence.
• You’ve staged the business so buyers see a clean, transferable operation with genuine potential.
• You’ve followed a structured readiness checklist that puts you ahead of 90% of business owners.

In other words, you’re turning your business into something rare: A business that is genuinely valuable to someone else, not just to you.

And here’s the beautiful part: Every improvement you make doesn’t just increase your exit valuation…It also improves your business today.

• Higher profit.
• Stronger systems.
• Less stress.
• More freedom.
• Better customers.
• A safer, more stable operation.

Preparing for sale forces you to build the kind of business you should have been building all along.

So don’t wait. Don’t put this off until “later” or “next year.”  Start now, because the earlier you begin the preparation process, the more control you have over your future sale price. You’ve already taken the first step. Now take the next one: turn your insights into action, close your value gaps, and build the business that will deliver the exit you deserve.

Your future buyer is out there, and right now, you’re shaping exactly how much they’ll be willing to pay.