Most CEOs spend years building their companies. They obsess over product, hiring, customers, and growth. But when it comes time to sell, many approach the process with far less rigor than they applied to building the business in the first place.
This is a mistake. The sale of your company is likely the largest financial transaction of your life, and the decisions you make in the months leading up to it will determine whether you walk away with a deal that meets your goals or one that falls short.
The challenge is that selling a business requires a completely different skillset than running one. CEOs who have never been through an exit often underestimate the complexity of the process and overestimate their ability to navigate it alone. They focus on finding a buyer when they should be asking more fundamental questions about their readiness, their representation, and their expectations.
Before you take your company to market, you need honest answers to five questions that will shape every aspect of your exit.
1. Why Am I Selling, and Is Now the Right Time?
This question sounds simple, but many CEOs struggle to articulate a clear answer. The reasons for selling matter because they affect everything from your timeline to your negotiating position to the type of buyer you should target.
Some CEOs sell because they are ready to move on after decades of building. Others sell because they see a window of opportunity in the market or because they need capital to fund the next phase of growth. Some are responding to health issues, family considerations, or partnership disputes. Each of these situations calls for a different approach.
The timing question is equally important. Buyers pay for future potential, which means selling when your business is growing and healthy will yield a better outcome than waiting until performance has plateued or declined. Many CEOs make the mistake of holding on too long, hoping for one more good year, only to find that the market has shifted or that their own energy for the business has waned.
If you cannot clearly explain why you are selling and why now is the right moment, you are not ready to begin the process. Buyers will ask these questions, and vague or unconvincing answers will raise concerns about your commitment to closing a deal.
2. What Do I Actually Need From This Sale?
CEOs often enter exit conversations with a number in their head, but that number is frequently disconnected from any real analysis of what they need to fund their post-exit life.
Before you start thinking about what your business might sell for, you should work backward from your financial requirements. How much do you need to maintain your lifestyle? What are your plans for the next phase of your life, and what will they cost? Do you have other assets, or is this sale your primary source of retirement funding? What are the tax implications of different deal structures, and how do they affect your net proceeds?
These questions are not just financial. They also involve thinking carefully about what you want for your company after you leave. Many founders care deeply about the legacy of their business, the treatment of their employees, and the continuation of their culture. If these factors matter to you, they need to be part of your exit criteria from the beginning, not afterthoughts that surface during negotiations.
The CEOs who achieve the best outcomes are those who enter the process with clear, specific goals that go beyond a simple sale price. They know their minimum acceptable terms, they understand the tradeoffs between different deal structures, and they have thought through what success actually looks like for them personally.
3. Is My Business Actually Ready to Sell?
Wanting to sell and being ready to sell are two different things. Many businesses that seem successful from the outside have issues that will surface during due diligence and either kill the deal or significantly reduce the sale price.
Buyers will scrutinize every aspect of your business, and they are looking for reasons to reduce their offer or walk away. Common issues that derail transactions include messy or inconsistent financial records, high customer concentration, excessive owner dependency, undocumented processes, and legal or regulatory risks that were never properly addressed.
If your business relies heavily on you personally, buyers will discount the value because they are acquiring a company that may not function without its current leader. If a single customer represents 30 or 40 percent of your revenue, buyers will see that as a major risk factor. If your financial statements are disorganized or cannot withstand scrutiny, the entire process will slow down while buyers try to figure out what they are actually purchasing.
The preparation work should begin well before you go to market. This means cleaning up your financials, building a management team that can operate independently, diversifying your customer base where possible, and documenting the key processes that make your business run. Successful entrepreneurs often spend 12 to 24 months preparing their businesses for sale, addressing weaknesses and strengthening their position before engaging with potential buyers.
4. Who Should Represent Me in This Process?
One of the most consequential decisions you will make is whether to handle the sale yourself or work with professional representation. Most CEOs significantly underestimate the time, complexity, and expertise required to run a successful sale process.
Selling a business is not the same as selling a product or closing a deal with a customer. It involves preparing detailed marketing materials, identifying and qualifying potential buyers, managing confidentiality throughout the process, negotiating terms and deal structures, and navigating due diligence while continuing to run your company. Business owners who try to manage this themselves typically spend 25 to 30 additional hours per week on the process, and they often achieve worse outcomes than those who work with experienced advisors.
The data on this point is clear. Businesses represented by qualified M&A advisors sell for 6 to 25 percent more than those sold by owners directly. Advisors bring expertise in valuation, access to networks of qualified buyers, experience in negotiation, and the ability to run a competitive process that drives up the final price.
The key is finding the right company to represent your business, which means identifying advisors with recent, relevant experience in your industry and with businesses of your size. A healthcare company needs an advisor who understands healthcare transactions. A manufacturing business needs someone with deep relationships in that sector. Generalist advisors or those without recent deal experience in your space will not deliver the same results as specialists who know your market and your buyers.
When evaluating potential advisors, ask about their track record with businesses like yours, the specific team members who will work on your transaction, their approach to buyer outreach, and their fee structure. The best advisors are transparent about their process and can point to recent, comparable transactions they have completed successfully.
5. What Are My Realistic Expectations for This Process?
CEOs are often surprised by how long the sale process takes and how much can go wrong along the way. Setting realistic expectations upfront will help you make better decisions and avoid costly mistakes.
A typical sale process takes 9 to 18 months from the decision to sell through closing. This includes time for preparation, marketing, buyer conversations, due diligence, negotiation, and final documentation. Deals that seem straightforward often hit unexpected obstacles, and even transactions that ultimately close successfully go through periods of uncertainty.
You should also be realistic about valuation. Many CEOs have inflated expectations based on headline numbers they have seen in the press or stories they have heard from other founders. Valuation depends on a range of factors specific to your business and your industry, and the only way to get an accurate sense of what buyers will pay is to work with advisors who have current market data and recent transaction experience.
Finally, be prepared for the emotional toll of the process. Selling a business you built is not a purely financial transaction. It involves letting go of something you created, often over many years. Many business leaders describe the sale process as one of the most stressful periods of their professional lives, even when the outcome is successful. Having realistic expectations and strong support systems in place will help you navigate the inevitable challenges.
Making the Decision
Selling your business is a decision that deserves the same careful analysis and preparation you applied to building it. The CEOs who achieve the best outcomes are those who take time to answer these five questions honestly before they begin the process.
If you find that you cannot clearly articulate your reasons for selling, that you are uncertain about your financial needs, that your business has significant issues that will surface in due diligence, or that you do not have the right representation in place, you are not ready to go to market. Taking more time to prepare will almost always yield a better outcome than rushing into a process you are not equipped to handle.
The sale of your company is a once-in-a-career event for most founders. Approaching it with the seriousness and preparation it deserves is the best way to ensure that you achieve the outcome you have worked so hard to earn.
