How do I prepare my business for sale?

How long does it take to prepare a business for sale?

Two years is comfortable, one year gets most of it done, and 90 days gets the books and the add-back schedule, which is still worth doing. The reason is how a buyer's accountant works. They rebuild your earnings from the last three federal returns and the bank statements, so a fix that only shows up in next year's return is worth less than one that shows up in two years of returns. Customer concentration is the slowest thing to change, usually 12 to 18 months. The books are the fastest, about 30 days for the add-back schedule and three monthly closes to prove the routine holds.

Most owners start late. The Exit Planning Institute reports that fewer than one in three owners has a written exit plan when the first buyer calls, and McKinsey's 2026 estimate is that roughly six million U.S. businesses will change hands by 2035. The buyer's accountant will have other companies to look at. The prepared one gets the cleaner offer.

What should I fix first? The books.

Everything else is priced off them. The standard is simple to state: a stranger can rebuild your earnings from your records and get the same number you do. That means a monthly close, revenue that traces to deposits, returns that agree with the P&L, and, if you carry work in process or service contracts, accrual books rather than cash. A job shop in Cook County with $400,000 of unbilled work at year end has a different year than its cash-basis P&L shows, and the accountant will find the difference in the first week. What a buyer pays for a Chicagoland shop once the books hold up, and how fast it can close, is on selling a manufacturing business in Chicago.

Then build the add-back schedule: one line per item, each tied to a ledger account and a receipt. One owner's salary and benefits, interest, depreciation, personal expenses the business paid, and expenses that will not recur. Take the deductions yourself before someone else takes them for you, including a family member paid below market and rent to your own LLC below the market lease. The formula and a worked machine-shop example are on seller's discretionary earnings. In the deals we see, cash-basis books with no monthly close typically cost 5 to 10 percent of the price in diligence, because what can't be verified gets treated as risk.

One caution. Do not switch the tax basis, the depreciation method or the fiscal year in the year before a sale without your accountant writing down why. A break in the series is the first thing the buyer's accountant asks about.

How do I make the business less dependent on me?

Write down everything only you do. Quoting, pricing, the top five accounts, hiring, the bank, the landlord, the one supplier who gives you terms. Then move each item to a named person over six to nine months, one at a time, and let them make the decision while you are still there to catch the mistake. The test a buyer applies is blunt: could the owner take two weeks off with the phone off? If the answer is no, the buyer prices the risk, and in the deals we see sales relationships that sit only with the owner take about half a turn off the multiple.

Name the second-in-command and put their retention in writing. A stay bonus tied to closing is common in Chicagoland deals; your attorney drafts it, and it goes in the deal file so the buyer knows the key person is staying before they ask.

What do I do about one big customer?

One account over about 20 percent of revenue rarely lowers the headline price. It changes the shape of the offer, with part of the price pushed into an earn-out or a holdback that pays only if that customer stays. You have two ways to work on it, and the time to start is the day you decide to sell. The first is the mix itself: new accounts, a second division, a service line the big customer does not buy. That is the 12-to-18-month fix. The second is proof of durability: a master service agreement with renewal terms, five years of invoices by account, the tooling, certifications or approvals that make switching expensive, and relationships below the purchasing manager. A distributor in DuPage County with two accounts at 40 percent of revenue and a signed three-year agreement on each is a different deal from the same distributor on handshake terms.

What should be written down before a buyer visits?

Procedures for the things only you know how to do, in enough detail that a competent manager could follow them. Controls a buyer will ask about: who can move money, who approves a price, who signs. An org chart and an employee census with tenure and pay (names stay out of anything a buyer sees before the NDA). Equipment maintenance logs and the safety record. The licenses and permits the business runs on, and which of them transfer; for HVAC, plumbing, electrical and roofing companies that question has its own page on selling a contracting business in Chicago. None of this is paperwork for its own sake. Each document answers a question the buyer's accountant or lender will otherwise price as unknown.

What goes in the deal file?

Every document diligence will request, assembled before anyone asks. When the business goes to market the data room already exists, and the 60 to 90 days from the letter of intent to closing are spent closing rather than searching for the lease. The table is the list we build in the Exit-Readiness Review, with how long each item usually takes a Chicagoland owner to assemble. The complete list, including what the SBA lender and an Illinois closing add, is on documents needed to sell a business.

Two Illinois items belong in the calendar rather than the file. The buyer files Illinois Form CBS-1 at least ten business days before closing and, in Cook County, the county's bulk-sales notice 45 days before the sale; both are on business broker in Illinois, and both are why a Chicago closing takes 60 to 90 days from the letter of intent rather than 30.

What should I not do in the year before a sale?

Do not stop spending on equipment and maintenance to pad the earnings. A buyer's accountant adds deferred maintenance back into the price, usually at a worse number than it would have cost you. Do not run personal expenses up on the theory that they will be added back; every add-back is a claim you then have to document, and the ones that fail come out of the price. Do not let the lease run down. A buyer and an SBA lender generally want the lease, with its renewal options, to run at least as long as the loan, and a landlord who knows you are selling negotiates differently. Do not tell the team early; most teams never learn an exit is being prepared until after the letter of intent, and you decide when. Do not change accountants, banks or software in the final year unless you have to, because every change is a break in the records the buyer is trying to trust. And do not take a buyer's first call without a number of your own.

A 12-month preparation timeline.

The order matters more than the dates. An owner with two years does the same list with more room; an owner with 90 days does the first row and goes to market with the rest priced honestly.

What happens from the first day on the market to the wire is on how to sell a business in Chicago: six to nine months end to end for a company with clean books. The data by deal size and for the Chicago metro is in how long does it take to sell a business.

What does preparation change in the price?

More than most owners expect, and the market is saying so out loud. BizBuySell's Insight Report for the third quarter of 2026 puts the median small-business sale price at $350,000 nationally, up 17 percent in a year, while the number of closed deals fell 7 percent. Buyers paid more for fewer, better-prepared companies. Deals above $1 million closed at 100.8 percent of asking; deals under $1 million closed at 93.6 percent. And the obstacle brokers named most often was SBA financing (38 percent), ahead of interest rates (34 percent), with 78 percent of buyers expecting to use an SBA loan. A lender's read of your books decides whether the deal closes at all, which is why the books are the first row of the timeline and not the last.

On a single business the arithmetic is on the Sale-Ready Program page: a $4 million DuPage County distributor with cash-basis books, two accounts at 40 percent of revenue and an owner who quotes every large order usually gives up several hundred thousand dollars in price and terms, against a fix cost in the tens of thousands. The ranges are wide because every business is different, and the multiples themselves, with their sources, are in what Chicagoland businesses actually sell for.

Do I need help, and what does it cost?

You can do most of this list with your own bookkeeper, accountant and attorney, and some owners should. What we offer is the order and the pricing of it. The confidential value range is free: revenue, industry and an email address, and within two business days you have a CPA-prepared range and the two or three items on this list a buyer's accountant would raise first. The Exit-Readiness Review is $4,500 flat and two weeks: a readiness scorecard across the five things buyers examine, a defended value range and a 90-day fix list, presented at your business, with the fee credited against the success fee if we later list the company. The Sale-Ready Program runs from $2,500 a month for six to twelve months; we implement the fix list with your team, you can stop with 30 days' notice, and we take no share of the increase in value. If the Review shows the gaps are small, we will say the Program isn't worth paying for. Sometimes the right answer is wait two years, and sometimes it is go to market this spring with the books done and the rest priced honestly.