Prepare a business the next owner can understand

Start by writing why you want to leave, which responsibilities you want to stop carrying and what constrains your timetable. Retirement, another opportunity and a difficult operating situation create different questions. Your preferred date does not establish that the business can transfer on that date. Keep the personal objective separate from the evidence a buyer or successor will need.

Sale preparation is useful even when the final route changes. You may decide to keep operating, prepare an internal succession, seek a different buyer or consider an orderly wind-down with appropriate advisers. The sellability self-check organizes six areas of evidence. It does not estimate value, choose an exit route or tell you whether a transaction should happen.

Begin with the records a reviewer can trace: financial statements, bank reconciliations, supporting invoices and the reports that feed the accounts. Identify which periods are complete and where explanations are still needed. Ask the person preparing the books to describe how the records connect. A neat folder is helpful, but it does not repair an unexplained difference between one report and another.

Keep a list of open questions with a responsible person and a source to examine. Preserve original records and explain corrections rather than silently replacing history. Plan how appropriate reviewers will receive information without casually sharing customer, employee or account details. Your accounting and legal advisers can help determine what is appropriate for your transaction and the stage of the discussion.

Explain how revenue is earned, what it costs to deliver, and which owner's activities are included in the expenses. When an adjustment is proposed, keep the source record and the reason beside it. A claim that an expense will disappear for a new owner needs examination. The buyer's staffing, financing and operating choices may differ from yours.

The seller's discretionary earnings guide explains the acquisition concept in more detail. That educational material does not turn a checklist into a pricing opinion. Avoid presenting an adjusted figure as an independently verified result. When a reviewer asks a question you cannot yet answer, record it as unresolved and work back to the evidence instead of making the narrative more confident.

List the decisions, relationships and ordinary tasks that stop when you are unavailable. Look beyond the organization chart. A supplier may only accept an urgent request from you, a customer may call your personal phone, or a team member may depend on your memory to price an unusual job. Each dependency is a preparation question, not an automatic reason that the business cannot transfer.

Observe work during a planned absence where appropriate, and record interruptions. Do not infer independence from a quiet day. Decide which responsibilities can be documented, which need training and which require a conversation about the proposed transition. The Run guide gives the operating method for documenting and testing a handoff before anyone describes it as transferable.

A future owner needs to understand customer, supplier, channel and key-person dependencies. Identify where revenue, access or specialist knowledge is concentrated and what records explain those relationships. There is no universal safe percentage in this guide. The significance depends on the relationship, the business and the terms a qualified reviewer can actually examine.

For each critical process, show the instructions, who performs it and the evidence that it is used. Include exceptions and known limitations. If an important employee has not agreed to a transition arrangement, do not describe retention as settled. If a contract's transfer position is unclear, put it on the adviser question list. Good preparation makes uncertainty visible rather than hiding it behind a polished sale presentation.

Outline the knowledge, introductions, access changes and recurring responsibilities that a successor would need to understand. Identify the work, who could perform it and what remains undecided. Your preferences for transition support are a starting point for discussion; the actual obligations belong in the reviewed transaction documents. Keep operating responsibilities clear while those discussions are in progress.

Illustrative example: an owner wants to sell a service business, but the weekly schedule depends on customer preferences stored only in the owner's memory. The preparation task is to document those preferences appropriately, have the scheduling person test the process and record remaining exceptions. This does not predict a sale price or guarantee that a buyer will accept the arrangement. It produces something concrete to examine. The Exit course is the next educational step for working through preparation in more depth.