Exits don’t fail at signing — they fail years before
Most business owners think exit preparation starts when:
a buyer calls
a broker is hired
or an LOI is signed
In reality, the outcome of a business sale is largely decided 12–24 months earlier.
This period determines:
valuation multiple
deal structure
tax outcome
and whether a transaction closes at all
1. Why early exit preparation pays off disproportionately
Exit preparation has one core objective: risk reduction.
Buyers don’t pay for history. They pay for predictable future cash flows with low dependency on the owner.
Even small improvements in structure often translate into multiple expansion, not just higher EBITDA.
2. The four pillars of exit readiness
A sellable business performs well in four dimensions:
1. Financial clarity
Clean, understandable financials
Adjusted EBITDA clearly documented
Separation of owner-related costs
👉 Impact: higher credibility, fewer price chips
2. Operational independence
Second management layer in place
Documented processes
Owner not required for daily operations
👉 Impact: higher multiple, broader buyer universe
3. Risk profile
No single customer dependency
Stable contracts
No unresolved legal or tax issues
👉 Impact: deal certainty, lower earn-outs
4. Equity story
Clear growth levers
Defensible market position
Credible upside narrative
👉 Impact: strategic buyers & PE interest
3. Typical value killers discovered too late
Most issues don’t kill deals — they kill valuation.
Common examples:
undocumented add-backs
customer concentration above 30–40%
missing second management layer
unclear ownership of IP
outdated shareholder agreements
All of these can usually be fixed — if addressed early enough.
4. 24-month exit readiness roadmap (high level)
24–18 months before exit
Financial normalisation
Exit target definition
Initial tax structuring review
18–12 months before exit
Strengthen management team
Reduce owner dependency
Clean up contracts & legal structure
12–6 months before exit
Prepare information memorandum
Buyer universe mapping
Dry-run due diligence
6–0 months
Structured sale process
Buyer competition
Price & structure optimisation
5. Exit readiness and valuation upside
A typical mid-market example:
EBITDA: €2.0m
Multiple before preparation: 5.0x
Enterprise value: €10.0m
After exit readiness measures:
EBITDA unchanged
Multiple: 6.5x
👉 Value increase: €3.0m — without revenue growth
This is why exit readiness has one of the highest ROIs in corporate finance.
Conclusion
Preparing a business sale is not about selling earlier. It’s about selling better.
Owners who start 12–24 months ahead:
achieve higher multiples
face fewer surprises
negotiate from strength
Those who don’t usually learn the hard way — during due diligence.
Start your valuation now
Theory is good, but concrete numbers are better.