Owners often come to me the month they decide to sell. By then, some of the best opportunities to increase value and reduce taxes are already gone. Two years out is a much better time to start.
You do not need to have a buyer lined up to begin. You just need to decide that a sale is somewhere in your future and start acting like it.
1. Clean up the entity and ownership structure
Buyers get nervous about messy cap tables, unclear ownership percentages, or entities that were never properly formed or maintained. Two years gives you time to fix this quietly, without a deal deadline pressuring the cleanup.
This is also the time to check whether your current entity structure supports the tax treatment you want on a future sale, including whether Section 1202 qualified small business stock treatment might be available if you convert or restructure early enough.
2. Get real financials, not just tax returns
Buyers want reviewed or audited financial statements, clean books, and financials that separate the business from your personal expenses. If your business has been run a little informally, this takes time to unwind.
Two years of clean, buyer-ready financials makes due diligence faster and gives buyers confidence in your numbers, which usually translates into a better price.
3. Reduce owner dependence
If the business cannot function without you personally, buyers will discount the price to account for that risk, or want you locked into a long earnout or employment agreement you may not want.
Use this window to document processes, delegate key relationships, and build a management team that can run daily operations without you in the room. This is often the single biggest lever for increasing sale value.
4. Lock down contracts and key relationships
Customer contracts, vendor agreements, leases, and employment agreements all get reviewed in due diligence. Change of control provisions, expiring contracts, and handshake deals all create friction or reduce value.
Two years gives you time to renew key contracts on stronger terms and put important relationships in writing before a buyer ever sees them.
5. Address intellectual property and legal exposure
Confirm that trademarks, patents, and other intellectual property are properly owned by the business, not by you personally or by a former entity. Resolve any pending disputes or compliance issues while you still have time and leverage to do it on your own terms.
A clean legal file speeds up due diligence and removes items a buyer might otherwise use to negotiate the price down.
6. Build your advisory team early
Your attorney, your accountant, and eventually an investment banker or business broker should be involved well before you sign a letter of intent. Structuring decisions made in year one of your two-year window are hard, sometimes impossible, to unwind by the time a buyer is at the table.
The owners who get the best results treat the sale process as something they prepared for, not something that happened to them.
If a sale is somewhere on your horizon, even a distant one, let's start the checklist now. Reach out through blgattorney.com or call my Oklahoma City office, and we will build a timeline that fits your goals.