Every buyer runs the same 9-point check. If you're preparing to sell your business, each point is a non-negotiable, and buyers start checking long before they make an offer.
Miss one and the buyer's lender prices it in. Pass all 9 and you sell closer to your number, with more of it in cash at closing.
The catch: buyers judge your last two to three years of numbers. So the clock on these 9 starts about three years before you list.
The 9 non-negotiables, in short:
- Know your number before a buyer names it.
- Close accrual books every month.
- Get personal costs out of the company.
- Recast your earnings so buyers can verify them.
- Show profit by job, program, or property.
- Keep any one customer from owning your revenue.
- Pass the two-week vacation test.
- Have the data room built before an offer arrives.
- Set the tax plan before you sign anything.
What happens when an owner skips the non-negotiables?
Example based on the kinds of owners we work with; names and numbers changed.
Mark ran a commercial electrical company doing about $3M a year in revenue. It paid him about $450K. He figured it was worth about $1.8M.
Then an early buyer's accountant asked for three years of monthly financials. Mark's books were a year behind. His truck and his family's phones ran through the company. Every big general contractor called his cell.
Six weeks later, the offer came in at about $1.1M. A third of it was an earnout he'd collect only if he stayed two more years. (That buyer wasn't using an SBA loan. SBA-backed deals no longer allow seller earnouts.)
That's three non-negotiables failed in one review: books, personal costs, and owner dependence.
Mark said no and brought in a CFO. Three years later he sold for close to his number, mostly in cash at closing. Here's the full list he worked through.
When should you start preparing to sell your business?
Start 18 to 36 months before you list, and about three years out if you want the most options. The sale itself then takes about six to twelve months. Buyers and their lenders review your last two to three years of results, so each non-negotiable needs that long to show up in your numbers.
Allegiance Capital puts the sale process at six to twelve months. BizBuySell and J.P. Morgan recommend starting preparation 18 to 36 months or more before that. The 9 non-negotiables below follow that clock: three for year three, three for year two, three for the final year.
Three years out: which non-negotiables come first?
Year three is about the books. Buyers can't trust any later number if the foundation is messy, and Mark's first low offer showed exactly where value was leaking.
1. Know your number before a buyer names it
If the first valuation you see comes from a buyer, you're negotiating blind. Get a baseline value now. Your CFO estimates what a buyer would pay today and lists the items pulling that number down. That list becomes your three-year plan.
2. Close accrual books every month
Buyers want to see when you earned money and when you spent it. Cash-basis books hide that. Monthly accrual books that match your tax returns are the first thing a buyer's accountant asks for, and Mark's were a year behind.
3. Get personal costs out of the company
Every personal expense on the books makes a buyer wonder what else is in there. The truck, the family phones, the vacation booked as a conference: move them out now so three clean years exist by the time you list.
Two years out: what must your numbers prove?
By year two, your numbers should tell the story without you in the room. These three are what got Mark's second buyer through review quickly.
4. Recast your earnings so buyers can verify them
Buyers price your business on what it really earns. Your CFO adjusts for one-time costs and your own pay so that earning power is visible. BizBuySell calls this recasting to Seller's Discretionary Earnings. Every adjustment needs a document behind it, or the buyer throws it out.
5. Show profit by job, program, or property
One total profit number makes a buyer guess. Profit by job for a contractor, revenue per member for a gym, property-level reports for a real estate operator: that detail shows which parts of the business make money, and buyers pay for it. Contractors can start with our job costing guide.
6. Keep any one customer from owning your revenue
If one customer is 30% of revenue, a buyer sees a business that could lose a third of its sales with one phone call. Two years is enough time to grow the rest of the book so no single name carries the company.
The final year: what has to be true before an offer?
In the final year, diligence should feel boring. Buyers find what you told them they'd find, and the last three non-negotiables make sure of it.
7. Pass the two-week vacation test
Take two weeks off. If the business notices, a buyer will too, and they'll ask you to stay on through an earnout. Hand key customer and vendor relationships to your team so they stay after you leave. Mark's foreman taking over the contractor calls is a big reason his sale closed mostly in cash.
8. Have the data room built before an offer arrives
Financials, tax returns, leases, contracts, and payroll records, all in one place. Scrambling for documents mid-deal slows the review and gives the buyer room to renegotiate. Baker Tilly describes readiness work like this as one to three years of financial, legal, and tax prep.
9. Set the tax plan before you sign anything
Deal structure decides how much of the price you keep. Your CPA and CFO look at it before an offer arrives, while you still have options. Once the letter of intent is signed, most of those options are gone.
Can you sell with fewer than three years to prepare?
Yes. Start with the three buyers check first: clean monthly financials (2), recast earnings (4), and a list of anything that would surprise a buyer. Six months of good books beats none. Expect the buyer to price in the shorter track record, usually through a lower price or tougher terms.
How does a fractional CFO help you pass all 9?
We build the numbers buyers ask for and walk through them with you every month, so you're ready whenever the right offer shows up. See our fractional CFO services and our advisory work, or how we work with trades contractors, real estate operators, and BJJ gyms. New to the role? Read what a fractional CFO does.
Thinking about selling in the next few years? Book a 30-minute call in the next two weeks and we'll score you on all 9 non-negotiables and tell you what to fix first.
Frequently asked questions
What are the non-negotiables before selling a business?
Nine things buyers and lenders check: a baseline valuation, monthly accrual books, personal costs removed, recast earnings, profit by job or segment, no over-reliance on one customer, a business that runs without you, a ready data room, and a tax plan set before any offer.
How long does it take to prepare a business for sale?
Plan on about three years of preparation, then six to twelve months for the sale itself. Buyers look at your last two to three years of results, so that's how long your clean numbers need to exist.
What do buyers look at first when they evaluate a business?
Your earnings, how steady they are, and how much the business depends on you. Clean monthly financials that match your tax returns make the first review go fast.
Can I sell my business in less than a year?
Yes, but you'll usually get a lower price or tougher terms. The buyer takes on more risk when the records are thin, and they charge you for it.
How do I know when it's time to sell my business?
Name the date you want out and the number you need, then count back about three years. If that start date has passed, begin with clean monthly books now. Whether and when to sell is your call; the numbers show what each choice is worth.
Do I need a CFO to sell my business?
You don't need a full-time one. A fractional CFO works a set number of hours each month to get your financials buyer-ready without a full-time salary.
About the author: Enoch Sng is Managing Partner of Black Lotus Financial Group. He started his finance career in 2019 in real estate private equity and later owned and operated one of the largest self-storage facilities in Utah. Today he helps small business owners with fractional CFO support, bookkeeping, cash flow, and exit prep.
Sources
- BizBuySell, How Far in Advance Should You Prepare to Sell Your Business? (18 to 36 months of preparation, accessed Oct 30, 2026)
- BizBuySell, Your Exit Planning Timeline (baseline valuation and accrual books, recast to SDE, data room, accessed Oct 30, 2026)
- BizBuySell, How Long Will It Take To Sell Your Business? (six to twelve months after listing, accessed Oct 30, 2026)
- Allegiance Capital, How Long Does It Take to Sell Your Business? (six to twelve month sale process, accessed Nov 2, 2026)
- J.P. Morgan, Pre-transition planning and business readiness (start preparation well before a sale, accessed Nov 2, 2026)
- Baker Tilly, Understand business transaction readiness (one to three years of financial, legal, and tax prep, accessed Nov 2, 2026)