Preparing your exit — making the business ready for sale
Last updated:
- Initial conversation free of charge, without obligation and strictly confidential
- More than 100 completed sales and successions in over 15 years
- The buyer’s perspective, not the adviser’s perspective
- No obligation to a later sale mandate
The price of a company is not decided at the negotiating table but in the one to two years before it. What was neglected there can later only be explained.
Preparing your exit means positioning the company so that a buyer can take it over without discounts. That is less a matter of cosmetics than a matter of which risks an acquirer has to price into the purchase price — and which ones can be taken off the table beforehand.
How buyers measure sale readiness
The assessment criteria are remarkably similar across industries and buyer types. Four points decide.
Independence from the owner
The most important point. When customer relationships, expertise and decisions depend on one person, the acquirer is buying a risk — and hedges it through long tie-in periods, earn-outs or purchase price retentions. An established second management level is the most effective value lever there is, and at the same time the one that takes longest.
Quality and traceability of the figures
Monthly reporting, clean accruals, a traceable reconciliation from the annual accounts to the normalised result. Where figures only come into being on request, a buyer assumes uncertainty and prices it in.
Concentration on customers and suppliers
If a substantial share of revenue depends on a few customers, or production on a single supplier, that is a well-known valuation discount. It can rarely be changed at short notice — but it can always be presented and explained openly, and that costs less than having it surface in due diligence.
Order in contracts and corporate matters
Articles of association and shareholder resolutions, lease, licence and customer contracts, intellectual property rights, contracts with related parties. Formal gaps rarely destroy value, but they reliably cause delay — and every delay costs negotiating position.
Exit readiness check: the ten fields we review
Sale readiness can be tested the way a buyer would test it. We work through ten fields — the same ones that later change price or contract in due diligence: dependence on the owner; a second management level; quality of the financial reporting; quality of earnings (recurring versus one-off, margin stability); customer structure and contract terms; supplier dependencies; change-of-control clauses and special termination rights in contracts; rights to your own product, brands and software; compliance, open audits and licences; and working capital plus deferred investment that a buyer will deduct from the price.
The result is a list of concrete points with impact and effort — a work plan, not a verdict. Owners who want to run the check themselves find the value levers and a scorecard in our Exit Readiness Guide. Good preparation works twice: on the normalised result that gets valued and on the multiple a buyer pays when risk is lower — and it shortens the process from the usual six to twelve months on the market to the three to six months in which we typically close a prepared company.
The typical deal-breakers
Some findings do not cost percentage points but the transaction. They need to be found beforehand.
Unclear rights to your own product
If it cannot be proven that software, trademarks or developments actually belong to the company — for instance because freelancers worked without an assignment of rights — that stops every professional buyer.
Open audit proceedings
Ongoing proceedings with the tax authorities or social insurance lead to retentions that run for years. Completed and documented proceedings, by contrast, are usually settled.
Change-of-control clauses
Customer, lease or financing contracts with a special termination right upon a change of ownership turn the sale itself into a risk. Whoever knows them can renegotiate them beforehand.
Mixing of private and business matters
Real estate, vehicles, insurance policies or loans between shareholder and company must be cleanly separated or at least fully disclosed. Whatever remains unclear here turns, in due diligence, into distrust of everything else.
The timeframe
Not everything can be changed equally fast. The sequence follows from the lead time.
Two years ahead
Building the second management level, reducing customer concentration, renegotiating loss-making legacy contracts, separating private and business assets. These are the measures that take time and have the greatest effect.
One year ahead
Preparing the financials, deriving the normalised result, reviewing all contracts, clarifying intellectual property rights, setting up the data room.
Six months ahead
Determining the structure and the tax parameters with your tax adviser, deciding between a full and a partial sale, preparing the documents for the approach to buyers. After that the actual process begins, described under selling your company.
How we support exit preparation
IGCP Capital Partners has worked as an independent transaction adviser for more than 15 years and has completed over 100 sales and successions. We look at your company from the perspective that counts: the buyer’s.
Status assessment
It starts with an honest assessment of where the company stands today — which discounts a buyer would apply today and why. The result is not a presentation but a list of concrete points with impact and effort.
Action plan and support
From that emerges a plan with sequence and timeline. Implementation rests with you and your specialist advisers; we accompany it, review progress from the buyer’s perspective and tell you when the company is ready for the process.
No obligation to sell
Exit preparation commits you to nothing. Many owners use it to decide in the first place whether and when a sale is an option at all. The first conversation is free of charge, without obligation and strictly confidential.
Once preparation is complete, selling your company describes the actual process. What your company is worth today is shown under company valuation.
Further reading: Increasing company value and Vendor due diligence.
Frequently Asked Questions
- How early should I start preparing my exit?
- One to two years before the intended sale. Within that window, the points that move the price most can still actually be changed: dependence on the owner, customer concentration, the quality of the financial reporting. Whoever starts only once the buyer is at the table can merely explain, no longer shape.
- What is the single most effective lever?
- A functioning second management level. The more customer relationships, technical knowledge and decisions depend on one person, the less the company is worth without that person — and the longer the buyer will want to tie that person in. Both cost purchase price.
- Is a vendor due diligence worthwhile?
- Above a certain transaction size, yes. Whoever knows the weaknesses of their own company before the buyer finds them loses less in the renegotiation. For smaller transactions a structured internal review along the same questions is usually sufficient.
- Do I have to increase earnings before the sale?
- Not at any price. Every experienced buyer recognises a result that has been dressed up in the short term during due diligence — and then views all the remaining figures more cautiously. It is more effective to derive the sustainable result cleanly and to explain one-off effects in a traceable way.
- What does exit preparation cost?
- That depends on the scope. A status assessment with an action plan is considerably less expensive than guided implementation over two years. The initial conversation, in which we assess the need, is free of charge and without obligation.
- What does exit readiness mean?
- Exit readiness describes how well a company is prepared to change owners without discounts and without delay. It is measured against the criteria buyers apply in due diligence: independence from the owner, quality and traceability of the figures, concentration among customers and suppliers, order in contracts and corporate matters, and the absence of deal-breakers. It is not a state you have or do not have, but a degree that can be raised deliberately within one to two years.
If you are planning a sale in the coming years, the initial conversation clarifies free of charge where your company stands today.