Every dollar of EBITDA improvement you make before selling gets multiplied by your industry’s earnings multiple. If your business sells at 4x EBITDA and you add $50,000 to the bottom line, that’s $200,000 on your sale price.
The 12 actions below are the highest-impact changes you can make in the 12-24 months before a sale. For each one, we’ve framed it as what it typically costs versus what it adds — because the ROI on pre-sale preparation is usually 5-10x or more.
1. Reduce Owner Dependency
What it costs: $80,000-$150,000/year for a general manager or operations manager, plus 6-12 months of transition time.
What it adds: 0.5-2.0x increase in your earnings multiple. On a business earning $400,000 EBITDA, that’s $200,000-$800,000 in additional sale price.
Owner dependency is the single biggest value destroyer for SMEs. If the business can’t run without you, buyers either walk away or apply a heavy discount. Hiring a capable number two and genuinely stepping back from day-to-day operations is the most impactful thing you can do.
Start by identifying the three tasks only you can do. Delegate everything else first, then systematically transfer those three tasks over 6-12 months.
2. Diversify Your Customer Base
What it costs: Marketing and sales investment of $20,000-$50,000/year, plus management attention.
What it adds: Removal of a 10-30% buyer discount for customer concentration risk.
If any single customer represents more than 15-20% of your revenue, buyers will discount the business for concentration risk. If that customer represents 40%+, many buyers will not proceed at all.
The fix takes time — typically 12-18 months of deliberate sales effort to bring in new accounts and reduce the proportional reliance on your largest clients.
3. Build Recurring Revenue
What it costs: Revenue model redesign, potentially some short-term revenue dip during transition, $10,000-$30,000 in implementation costs.
What it adds: 0.5-1.5x increase in earnings multiple. Recurring revenue businesses trade at significant premiums to project-based or transactional businesses.
Convert one-off engagements to retainers, subscriptions, or maintenance contracts wherever possible. Even converting 20-30% of revenue to a recurring model materially improves buyer perception and your multiple.
A landscaping business that moves from one-off jobs to monthly maintenance contracts. An IT firm that shifts from project work to managed services. A marketing agency that moves from campaigns to retainers. Each transformation increases value disproportionately.
4. Clean Your Financials
What it costs: $5,000-$15,000 in accounting fees for a full normalisation and restatement of 3 years of financials.
What it adds: Faster sale process, fewer due diligence issues, and 5-10% higher price through increased buyer confidence.
Buyers lose confidence when financials are messy, inconsistent, or require extensive explanation. Engage your accountant to prepare clean, normalised financial statements that clearly show the true earning power of the business.
Remove all personal expenses. Reconcile every account. Ensure revenue recognition is consistent. Prepare a clear normalisation schedule that shows adjustments transparently.
5. Secure the Lease
What it costs: Potentially some rent increase to negotiate a longer term; legal fees of $2,000-$5,000.
What it adds: A lease with less than 3 years remaining can reduce your sale price by 20-40%. A 10+ year lease with reasonable terms adds certainty that buyers will pay for.
If your lease is up for renewal in the next 2-3 years, negotiate a new long-term lease now. Include assignment clauses that allow the lease to transfer to a buyer without landlord consent (or with reasonable consent provisions).
For location-dependent businesses — retail, hospitality, medical, childcare — the lease is often the second most important factor after earnings.
6. Retain Key Staff
What it costs: Retention bonuses of 3-6 months’ salary for critical employees, payable on completion of a transition period post-sale; total cost typically $30,000-$100,000.
What it adds: Protection of the entire goodwill value. Key staff departing during a sale process can reduce the price by 10-25% or kill the deal entirely.
Identify your 3-5 most critical employees. Put retention arrangements in place before you go to market. These can be structured as stay bonuses payable 6-12 months after settlement, funded from the sale proceeds.
Do not tell staff you’re selling until you have a signed deal — but have retention arrangements ready to deploy immediately once the announcement is made.
7. Systemise Operations
What it costs: $10,000-$40,000 in software, consultant fees, and staff time to document and implement systems.
What it adds: Demonstrable transferability that increases buyer confidence and supports a higher multiple. Typically adds 5-15% to sale price.
Create standard operating procedures for every critical business function. Implement or upgrade software for CRM, accounting, project management, and operations. Ensure that any competent operator could pick up your systems manual and run the business.
Buyers pay more for systems than they pay for people — because systems are scalable and transferable while individual knowledge is not.
8. Invest in Brand and Marketing
What it costs: $20,000-$60,000/year in brand development, digital presence, and marketing.
What it adds: Shifts goodwill from personal to commercial. A strong brand that generates inbound leads independently of the owner can add 0.5-1.0x to the earnings multiple.
Update your website, invest in SEO, build a social media presence, and create content that positions the business (not you personally) as the authority in your space. Every lead that comes through the brand rather than through your personal network is commercial goodwill, not personal goodwill.
9. Resolve All Disputes and Liabilities
What it costs: Legal fees of $5,000-$30,000 depending on complexity, plus whatever settlement amounts are required.
What it adds: Removal of contingent liabilities that buyers would otherwise discount heavily or use as deal-breakers during due diligence.
Outstanding legal disputes, employee claims, tax issues, warranty claims, or compliance breaches create uncertainty that buyers hate. Resolve everything you can before going to market. For items that can’t be fully resolved, prepare a clear summary with legal advice on likely outcomes and costs.
A single unresolved dispute can delay a sale by months or reduce the price by far more than the cost of settling it.
10. Optimise Pricing
What it costs: Nothing — or minimal implementation effort.
What it adds: Direct EBITDA improvement that gets multiplied by your earnings multiple. A 5% price increase on a $2M revenue business adds $100,000 to revenue. At a 4x multiple, that’s $400,000 in business value (assuming margins hold).
Many business owners have not raised prices in years. Implement overdue increases 12-18 months before selling so the improved margins are reflected in at least one full year of financial statements.
Review your pricing against competitors. Identify under-priced products or services. Introduce tiered pricing or premium offerings. Every dollar of price increase flows almost entirely to profit.
11. Document Intellectual Property
What it costs: $5,000-$20,000 in trademark registrations, IP audits, and legal documentation.
What it adds: Formal IP protection that creates defensible competitive advantages and supports the goodwill valuation.
Register trademarks for your business name, logos, and key product names. Document proprietary processes, recipes, formulas, or methodologies. Ensure all software licences are current and properly assigned to the business entity. Confirm that employment contracts include IP assignment clauses.
Unregistered or poorly documented IP is a due diligence red flag and a valuation risk.
12. Build a Management Team
What it costs: $150,000-$300,000/year in additional management salaries (which reduce EBITDA in the short term).
What it adds: Transforms the business from an owner-operated enterprise to a management-run enterprise. This is the single biggest driver of valuation multiples for SMEs. Can increase the multiple by 1-3x.
This overlaps with reducing owner dependency but goes further. A full management team — operations, sales, finance — signals to buyers that the business is scalable and not reliant on any individual.
Yes, the additional salaries reduce short-term EBITDA. But a business earning $300,000 EBITDA with a management team might sell at 5-6x ($1.5M-$1.8M), while a business earning $400,000 EBITDA without one might sell at 2-3x ($800K-$1.2M). The lower-earning business with the team is worth more.
Prioritising Your Efforts
Not every business needs all 12 items. Focus on the actions that address your biggest vulnerabilities:
- If buyers keep asking about you personally: Focus on items 1, 6, 8, and 12
- If your financials are messy: Focus on items 4 and 10
- If you have concentration risk: Focus on items 2 and 3
- If your business feels informal: Focus on items 5, 7, 9, and 11
Start with the items that have the highest impact relative to cost and time. Owner dependency and lease security are almost always the top priorities.
The Bottom Line
Preparation is not about making your business look good on paper. It’s about genuinely building a more valuable, transferable, lower-risk enterprise. Buyers are sophisticated — they can tell the difference between cosmetic improvements and structural value creation.
Give yourself 12-24 months. Work through this checklist systematically. The return on investment is almost always substantial.
Ready to see where your business stands? Use our free valuation calculator to get an indicative value, or contact us to discuss a pre-sale strategy.
Related reading:
- Preparing Your Business for Sale — the full 12-month sale preparation timeline
- What Buyers Look for When Buying a Business — understand buyer priorities
- How Much Is My Business Worth? — valuation methods explained