The Exit Planning Timeline

The most common timeline mistake: starting six months before you want to close. It usually means delaying the sale or accepting less. The strongest exits are planned 18 to 24 months ahead.

Simpler businesses can sometimes compress this. More complex ones, with several locations or entities, may need longer. Treat it as a guide, not a rule.

1. 24 to 18 months before close

   Foundation

   • Get a preliminary valuation so you know your baseline
   • Set your goals: timing, price expectations, structure and what happens to your team
   • Bring in a CPA with transaction experience for tax planning
   • Begin financial cleanup: personal expenses out, owner pay normalized
   • Identify and start developing your number two
   • Review corporate documents: ownership, operating agreement, shareholder agreements
   • Assess customer concentration and start diversifying if needed

2. 18 to 12 months before close

   Strengthening the business

   • Document recurring revenue with contract data
   • Write down how the business runs: processes, roles, handoffs
   • Address key employee retention
   • Title trademarks, domains and software to the company
   • Review major contracts for assignability and renewal dates
   • Reconcile three years of tax returns to your financial statements

3. 12 to 6 months before close

   Preparing for market

   • Build a normalized earnings schedule with support for every add-back
   • Consider a sell-side Quality of Earnings review
   • Set up the data room
   • Engage your M&A advisor and agree on the buyer approach
   • Find the problems in your numbers before a buyer does
   • Prepare the confidential information memorandum

4. 6 months to signing

   The sale process

   • Confidential outreach to qualified buyers, managed by your advisor
   • NDAs signed before any detailed information is shared
   • Management meetings with serious buyers only
   • Compare offers and negotiate the letter of intent
   • Sign with your preferred buyer and begin exclusivity

5. Signing to close, often about 3 months

   Diligence and closing

   • Deliver diligence materials promptly and completely
   • Work through the buyer's accounting, legal and operational reviews
   • Negotiate the purchase agreement
   • Resolve diligence findings with your advisor beside you
   • Agree the transition plan and how employees and customers are told
   • Close, receive the wire, and plan what comes next

Principles behind the timeline

Fix problems in year one, before diligence finds them

Every issue a buyer finds in diligence becomes leverage for a lower price. Every issue you fix in advance, such as customer concentration, key person risk or messy financials, takes that leverage away.

The business has to perform during the sale

Nothing weakens a deal faster than results slipping mid-process. The team you build early in this timeline is the same team that lets you focus on the transaction later.

Bring in your advisor early

A good M&A advisor does more than run a sale at the end. They help position the business, identify the right buyers and manage the deal from first conversation to closing. Engage early enough for that to count.