Readiness Has a Lead Time: What to Fix First When the Exit Is Two Years Out
Owners tend to think of getting ready to sell as a project they will start when they decide to sell. It almost never works in that order. Most of what makes a business easy to buy takes longer to build than a sale process takes to run, and the items with the longest lead time are the ones buyers weigh most heavily. So the useful question two years out is not "what should I fix" — it is "what should I fix first," and the answer is: whatever takes longest to show up in the numbers.
1. Start with what takes the longest: the business without you
Buyers price owner dependency harder than almost anything else, and it is the slowest thing to change. Hiring or promoting a second-in-command, handing them real authority, and then having eighteen months of evidence that the business ran fine under that arrangement — that is a two-year job by definition, because the evidence is the point. A manager hired six months before the sale is a hire, not a track record. The same goes for customer relationships that live with the owner: moving a top account to a team member and letting it renew under them takes a full renewal cycle, and the buyer will ask when that happened. If the exit is two years out, this is the first thing to start and the last thing to finish.
2. Then the things that need a full year of history
A buyer reads twelve months as a unit. Anything you want to be true in the diligence package needs to be true for a trailing year, which means it has to start now to count. Monthly financials closed within a couple of weeks, on an accrual basis, with the balance sheet reconciled — a buyer will want to see that as a habit, not a cleanup. Pricing: if margins can carry an increase, take it early enough that the buyer sees a year of retention at the new price rather than a raise taken to dress the numbers. Customer concentration: winning three new accounts to bring the top customer from 40 percent of revenue to 25 is a sales cycle plus a year of billing, not a decision. Each of these is a twelve-to-eighteen-month item, and each one moves the number.
3. Then the paperwork, which is faster than it looks but has a queue
Contracts, leases, and intellectual property are the readiness items owners put off longest and buyers find fastest. Customer contracts with change-of-control clauses need consent at close, and knowing which ones those are, and renegotiating the worst of them at the next renewal, is a rolling task across the two years. The lease needs a term and an assignment clause that will outlast the buyer's financing. Anything the business depends on that is titled in the owner's name — a trademark, a domain, a piece of real estate, a vehicle fleet — needs to be moved into the company or sorted into a clear lease. None of these take long individually. Collectively they take a year, because each one depends on a counterparty's calendar.
4. Last, the things that are genuinely quick
Some readiness is a matter of weeks, and it belongs at the end so it reflects the business as it will be sold. A sell-side quality of earnings review, done six to nine months out, so that surprises surface to you before they surface to a buyer. A clean add-back schedule with documentation behind every line. An organized data room. A one-page summary of the business a stranger could read. These matter, and owners sometimes mistake them for the whole job. They are the finishing work. Done first, they only document the problems you have not yet fixed.
5. What sequencing does to the price
Order matters because a buyer pays for evidence, not intent. A business two years into a management transition, with a year of clean monthly closes and a top customer under 25 percent, is a different asset from the same business with a plan to do all of that. The first one is priced as earnings. The second is priced as a promise, and the buyer discounts the promise for the chance it does not happen. The gap between the two is routinely a full turn of the multiple, and sometimes it is the difference between a sale and no sale at all.
The takeaway
Readiness is not a checklist you run before going to market. It is a sequence, and the sequence is set by how long each item takes to show up in the record a buyer will read. Start with the slowest items — the business without you, the trailing year of clean numbers — and finish with the quick ones. Two years is enough time to do all of it. It is not enough time to do it in the wrong order.
Wondering what your business could be worth? Request a free, confidential market assessment from Jackim Woods & Co., or book a confidential intro conversation with Jim Bates. No pressure, no obligation — just a senior-level read on where you stand.
