Selling Your Business? Key Moves to Make 12–24 Months Before the Deal
Updated: Sep 24
The best time to prepare your business for sale is before anyone knows it’s for sale.
That quiet 12 to 24 month window is where a lot of the deal value gets made. Not in a dramatic boardroom scene. Not in a last-minute scramble with files flying around like a confused pigeon. The real work is calmer than that: clean numbers, steady operations, less owner dependence, and fewer surprises.
This post is informational only. A business sale can affect tax, contracts, staff, and personal wealth, so get advice from qualified legal, tax, and finance professionals before making big decisions.
Start with clean numbers buyers can trust
A buyer doesn’t just buy your business. They buy your story about the business.
And your numbers are the receipts.
If the accounts are messy, the buyer has to guess. Guessing makes people nervous. Nervous buyers ask for a lower price, extra conditions, or both. Delightful, right? Nothing says romance like, “Please explain these unexplained cash withdrawals from 18 months ago.”
Start by getting the last two to three years of financial records in shape. That usually means:
Sales records match bank deposits.
Expenses are properly recorded.
Personal spending is separated from business spending.
Tax filings are complete and consistent.
Supplier and customer payments can be traced.
Stock records make sense.
Clean numbers matter because most buyers value a business based on future earning power. The International Valuation Standards Council, which sets widely used guidance for valuing assets and businesses, explains that income-based valuation looks at expected future cash flows. In plain English, buyers care about how much money the business can make after they take over.
If your records are confusing, the future looks foggy.
Remove personal expenses from the business
Owner-run businesses often carry personal expenses inside the accounts. A family phone plan here, a personal car repair there, a “business lunch” that looks suspiciously like a cousin’s birthday dinner.
Before a sale, clean this up.
If an expense is truly personal, take it out. If an expense is mixed, document it clearly. Buyers will usually adjust earnings to understand the real profit of the business, but they’ll only accept adjustments that are believable and backed by records.
A simple example:
A business shows PKR 12 million in yearly profit. The owner also runs PKR 1 million of personal expenses through the business. If those expenses are well documented and clearly non-business, a buyer may view the real profit as closer to PKR 13 million.
If the expenses are vague, the buyer may ignore them. Worse, they may wonder what else is hiding under the sofa cushions.
Make monthly reports a habit
Don’t wait until year-end to find out how the business is doing. Prepare simple monthly reports.
They don’t need to look fancy. They need to be useful.
Track:
Sales
Cost of goods or services
Wages
Rent
Utilities
Marketing costs
Profit
Money owed by customers
Money owed to suppliers
Stock levels, if relevant
Monthly reports show patterns. Maybe Ramadan sales rise sharply. Maybe summer slows things down. Maybe one supplier’s prices keep creeping up like they’re training for a marathon.
Patterns help buyers understand the business. They also help you fix problems before the sale process begins.
Reduce the risk that walks out when you leave
Here’s the awkward truth: if the business depends completely on the owner, the buyer is not buying a business. They’re buying a very stressful job.
That lowers value.
A sale-ready business can run without the owner handling every decision, every complaint, every supplier call, and every tiny fire. If you’re the only person who knows how prices are set, who the best customers are, where key documents live, and which machine makes that “don’t ignore me” noise, start transferring knowledge now.
Write down how the business works
Create simple process notes for repeat tasks.
Use plain language. No need to produce a 200-page manual that could stun a buffalo. Start with the tasks that matter most:
How orders are received
How prices are quoted
How stock is ordered
How complaints are handled
How cash is reconciled
How wages are processed
How quality is checked
How key suppliers are contacted
A buyer wants to know the business can continue after the ownership change. Written processes make that easier to believe.
Train the team before the deal
If staff rely on the owner for every decision, buyers see risk. If a manager or senior team member can handle daily operations, buyers see stability.
Over 12 to 24 months, give trusted people more responsibility. Let them handle supplier calls. Let them manage schedules. Let them solve customer issues. Then track the results.
This also helps during buyer checks. If the buyer asks, “Who manages operations when you’re away?” the answer should not be, “No one, but my phone has excellent battery life.”
Reduce customer concentration
Customer concentration means too much revenue comes from too few customers. Avoid the term in buyer conversations if it feels too technical, but understand the risk.
If one customer brings in 40 percent of sales, the buyer will worry. What happens if that customer leaves after the sale? What if they were loyal to the owner, not the business?
Use the preparation period to broaden the customer base.
That could mean:
Winning smaller regular customers
Reconnecting with past customers
Adding longer-term supply agreements where suitable
Improving repeat purchase rates
Reducing reliance on one large account
No buyer expects perfection. They do expect you to know the risk and show progress.
Fix the boring stuff that can kill a deal
Many deals don’t fall apart because the business is bad. They fall apart because basic issues create doubt.
Missing contracts. Unclear property terms. Disputes with staff. Expired licences. Old tax problems. Supplier arrangements based on a handshake and three cups of chai.
Boring? Yes. Powerful? Also yes.
Check all major contracts
Review contracts before speaking to buyers. If a buyer finds problems first, you lose control of the conversation.
Look at:
Shop or factory lease terms
Supplier agreements
Customer contracts
Staff agreements
Loan documents
Equipment finance
Licence or permit requirements
Insurance cover
Pay attention to change of ownership clauses. Some contracts may need approval before the business is sold. If a landlord or supplier can cancel after a sale, the buyer will want to know.
This is where a lawyer earns their tea.
Settle disputes early
If there are open disputes, deal with them before the sale process. A pending legal issue can scare buyers, even when the amount is small.
Common examples include:
Unpaid supplier claims
Customer complaints
Staff payment disputes
Property disagreements
Tax notices
Warranty claims
Don’t hide issues. Buyers usually find them during checks. Hidden problems feel bigger than disclosed problems because they raise a nasty question: what else hasn’t been shared?
A clean disclosure beats a surprise every time.
Make assets easy to verify
Buyers will want to know what the business owns. That includes machines, vehicles, stock, tools, equipment, and sometimes intellectual property like recipes, designs, or software.
Prepare a simple asset list.
Include:
Item description
Purchase date, if known
Condition
Ownership status
Any loans or payment plans attached
Estimated current value, where sensible
For stock-heavy businesses, stock accuracy matters. If your records say PKR 8 million of stock exists, but half of it is slow-moving or damaged, the buyer will adjust the price. And they won’t adjust it upwards out of kindness. Buyers are funny like that.
Improve profit before you try to prove value
The 12 to 24 months before a sale is not the time for wild experiments. It’s the time to improve the basics.
Buyers like steady, explainable profit. A sudden spike can help, but only if it looks real and repeatable. If last year’s profit jumped because you cut repairs, delayed supplier payments, and stopped replacing stock, the buyer will spot it.
The goal is not to make the business look better for one month. The goal is to make it actually better.
Raise prices where the market allows
Many owners avoid price increases for years. Then costs rise and margins shrink. Before a sale, review pricing carefully.
You don’t need to raise everything overnight. Test small changes. Focus on products or services where demand stays strong.
Example:
If a service costs PKR 10,000 and your cost to deliver it is PKR 7,000, your gross profit is PKR 3,000. A price increase to PKR 11,000, with the same cost, raises gross profit to PKR 4,000. That’s a meaningful improvement.
Of course, customers must still see value. A price rise with poor service is just an invitation to shop elsewhere.
Cut waste, not muscle
Cost control helps, but don’t damage the business just to make short-term profit look better.
Good cuts include:
Unused subscriptions
Repeated delivery mistakes
Excess stock
High spoilage
Unnecessary overtime
Poor supplier terms
Energy waste
Bad cuts include:
Skipping maintenance
Understaffing busy periods
Reducing product quality
Ignoring customer support
Delaying required payments
A buyer can tell the difference between a lean business and a starved one. A starved business looks good for a moment, then collapses like cheap plastic furniture.
Build repeat revenue
Repeat revenue makes buyers more comfortable. It shows customers come back without the owner personally chasing each sale.
Depending on the business, repeat revenue could come from:
Maintenance plans
Monthly supply orders
Service retainers
Subscription-style delivery
Long-term customer agreements
Regular purchase schedules
Keep it simple. If customers already buy every month, document it. If some would agree to a written arrangement, explore that early.
A few steady income lines can make the business easier to value and easier to transfer.
Prepare for buyer checks before buyers arrive
Once serious buyers appear, they’ll ask for documents. Lots of documents. Then more documents. Then one document you’re sure nobody has asked for since 2017.
Don’t wait.
Create a secure folder with organised records. Use clear names and dates. The point is to make buyer checks smooth, not to make someone feel like they’re solving a treasure hunt designed by an accountant with a grudge.
Build a sale folder
Include:
Financial statements for the last three years
Tax filings and payment records
Monthly reports
Bank statements
Customer summaries
Supplier summaries
Lease or property documents
Staff records
Asset list
Insurance documents
Licences and permits
Loan documents
Stock reports
Key process notes
Keep sensitive customer or staff information protected. Share only what is appropriate, and use professional advice before giving buyers private records.
Know your story
Numbers matter, but buyers also want the story behind them.
Prepare clear answers to simple questions:
Why are you selling?
What drives sales?
Which costs are rising?
What are the main risks?
Where can the business grow?
What role does the owner play?
Which staff members are key?
What would you fix with more time?
Be honest. A buyer doesn’t need a fairy tale. They need a business they can understand.
A strong answer might sound like this:
“Sales dipped last year because we stopped supplying one low-margin customer. Profit held steady because the remaining work had better margins. We’ve since added three smaller regular customers, which reduced the risk.”
That answer is calm, specific, and believable. Much better than, “Everything is amazing, please don’t look too closely.”
Plan your own exit before asking for offers
A business sale is not only about the buyer. It’s also about your life after the deal.
Think through what you want before negotiations begin.
Do you want to leave quickly? Stay for three months to help the handover? Keep a small ownership share? Sell assets only? Sell the full company? Keep the property and rent it to the buyer?
Each choice affects the deal.
Decide what a good deal means
Price matters, of course. But deal terms matter too.
Consider:
How much is paid upfront
Whether any payment comes later
What happens if sales drop after the sale
How long you must stay involved
Whether you give any promises about past issues
What happens to staff
Whether the buyer takes over debts
How tax affects what you keep
A higher price with risky future payments may be worse than a lower price paid clearly and quickly. Cash in hand has a lovely personality.
Get the right advisers early
Bring in advisers before you feel desperate. That could include an accountant, a tax adviser, a lawyer, and someone experienced in business sales.
Good advisers help you avoid painful mistakes. They can also tell you what buyers are likely to question, which documents to prepare, and how to manage tax and legal risks.
Don’t wait until an offer lands. By then, the clock is ticking, emotions are high, and someone will inevitably say, “Can we get this done by Friday?” Famous last words.
The real win is fewer surprises
Selling a business is easier when buyers don’t have to guess.
Use the 12 to 24 months before the deal to clean the accounts, reduce owner dependence, fix legal and contract issues, improve profit in honest ways, and organise the paperwork. None of this is glamorous. It won’t get a movie scene. But it can protect value and reduce stress when the deal gets serious.
The big takeaway is simple: prepare the business like you won’t be there forever. Because if the sale goes well, you won’t be.
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