Planning to Sell Your Business in 2027? Do These 7 Things Before 2026 Ends
- Mark Hartmann, MBA
- 13 minutes ago
- 15 min read
If 2027 is your exit year, the next six months are not a waiting period. They are your best window to create leverage.
If 2027 Is Your Exit Year, 2026 Is Your Leverage Year
If you’re thinking about selling your business in 2027, here’s the good news: you still have time to improve your outcome.
Here’s the bad news: you probably have less time than you think.
Many owners believe the sale starts when they go to market. They picture hiring an advisor, pulling together financials, meeting buyers, fielding offers, and signing on the dotted line.
But that’s not how successful exits usually work.
The best exits are built long before any buyer shows up. The real work happens before the Confidential Information Memorandum is drafted, before buyer meetings, before the Letter of Intent, and before due diligence puts your business under a microscope.
If 2027 is the year you want to sell, use the second half of 2026 to create leverage. Leverage comes from clean financials, a strong management team, reduced owner dependency, clear growth opportunities, defensible add-backs, customer stability, a buyer-ready story, and a realistic valuation. In short, a business that looks less risky tomorrow than today.
That's what buyers pay for: confidence. And your job between now and the end of 2026 is to give them as much of it as possible.
Because when that confidence is missing, the consequences are usually worse than losing the buyer entirely. Often, the buyer stays in the deal and uses the uncertainty to lower the price, change the structure, demand seller financing, push for an earnout, increase escrow, or ask you to stay involved longer than planned. That's how a great-looking headline offer turns into a disappointing closing.
So if you want to sell your business in 2027, here are seven things to tackle before 2026 ends.
1. Get a Real Pre-Sale Valuation and Readiness Review
Before anything else, you need to find out what a serious buyer is likely to pay for your business, why they’d pay it, what risks they’ll see, and what you can still improve before going to market.
Many owners already have a number in their heads. Sometimes it comes from a friend who sold a different type of business. Sometimes it comes from a rule of thumb. Sometimes it comes from multiplying EBITDA by whatever multiple sounds good at dinner.
That’s not a strategy. That’s hope wearing a spreadsheet costume.
A real pre-sale valuation should help you understand your Most Probable Sales Price, not just the highest theoretical value someone can justify on paper. It should look at your revenue trends, margins, customer concentration, adjusted earnings, industry conditions, recurring revenue, working capital, management depth, growth prospects, and buyer universe.
It should also help answer a deeply personal question: will the sale actually support the life you want after the business?
That question matters. I talk about this in my book, Sweat Equity Payday: For most owners, the sale is the single biggest payday of their life, and it has to fund everything that comes after. You don’t want to discover too late that your expected number doesn’t produce the after-tax proceeds you need.
Before 2026 ends, you should know:
What your business is realistically worth today.
What factors are helping or hurting valuation.
What a buyer would likely challenge.
What changes could improve price or deal terms.
What you might actually walk away with after taxes, debt, working capital adjustments, and transaction costs.
If you skip this step, you may enter 2027 with an asking price the market won’t support. That can lead to weak buyer interest, stale marketing, extended timelines, and painful renegotiations.
Worse, you may build your retirement plan around a number that was never realistic.
2. Clean Up Your Financials Before Buyers Start Looking
Buyers may love your story, your people, your reputation, and your growth potential. But eventually, they’re going to ask for the numbers. And when they do, the numbers need to be clean, consistent, and explainable.
This is where many owners get caught off guard. They’ve run successful businesses for years with financial statements that are good enough for tax filing, internal management, or bank reporting. But selling a business requires a higher standard.
Buyers want to know what the business actually earns. Lenders want to know whether the cash flow supports the debt. Attorneys and accountants want documentation. Private equity buyers, strategic buyers, and serious individual buyers will want to understand every add-back, adjustment, trend, and unusual expense.
And here’s what most owners don’t realize until it’s too late: your CPA’s job is to minimize your tax burden. That’s good tax advice, but tax advice and transaction advice are two different conversations. The expenses your CPA told you to run through the business may be perfectly legal, but if you can’t defend them as clean add-backs when a buyer’s accountant is sitting across the table, they’ll cost you money at close.
Before 2026 ends, work with your accountant and advisor to clean up:
Profit and loss statements.
Balance sheets.
Tax returns.
Interim financials.
Payroll records.
Add-backs and discretionary expenses.
Accounts receivable and accounts payable.
Inventory records.
Revenue by customer, product, service line, or location.
Gross margin trends.
Owner compensation and related-party expenses.
The goal here is to make the business understandable, not perfect. If you have legitimate add-backs, document them. If there were one-time expenses, explain them. If margins changed, know why. If revenue dipped, be ready to discuss what happened and what’s changed.
Buyers can live with imperfection. What they can’t live with is a seller who doesn’t understand their own numbers.
If you wait until 2027 to clean up the financials, you may lose valuable time. You may also lose credibility. Once a buyer starts questioning the quality of your financial information, every other part of the deal gets harder.
I tell every seller the same thing: in God we trust. Everyone else? Prepare for due diligence.
3. Reduce Owner Dependency
This may be the most important item on the list.
If you are the business, the business is harder to sell.
You’re obviously valuable. The problem is that buyers are afraid the value walks out the door when you do.
Many business owners are the hub of the wheel. They manage key customer relationships. They approve every decision. They solve operational problems. They know the pricing history. They understand the vendors. They hold the institutional memory. They drive sales. They calm employees. They are the culture.
All of that may have helped you build the business. It becomes a liability when you try to sell it.
Here's a quick way to measure how deep the problem goes. I call it the Kidnap Test: if you disappeared tomorrow, could the business keep running? Could your team handle the customers, the vendors, and the day-to-day decisions? Or would everything grind to a halt? If the answer makes you uncomfortable, a buyer will feel the same way. And that discomfort affects price, structure, and terms.
Before 2026 ends, start making the business less dependent on you.
That may mean:
Documenting key processes.
Delegating customer relationships.
Building a stronger management team.
Identifying a second-in-command.
Creating standard operating procedures.
Reducing your involvement in daily decisions.
Tracking sales activity outside of your personal relationships.
Giving managers more accountability.
Training employees to solve problems without you.
These aren't overnight fixes. But six months is enough time to make real progress, and buyers will notice the difference. Owner dependency doesn't always kill a deal. But it almost always changes the deal.
You want to sell a company, not a job with a customer list attached.
4. Build the Buyer Story Before the CIM Is Written
The Confidential Information Memorandum (CIM) is the marketing book for the sale of your business. Getting it right is critical to securing the best price and the best overall deal terms.
But here’s the part a lot of owners miss: the CIM can only tell the story the business gives it.
If your growth story is vague, the CIM will be vague. If your financials are confusing, the CIM will have to explain the confusion. If the business is overly dependent on you, the CIM can’t make that problem disappear. If there are no documented systems, no clear growth plan, and no defensible market position, buyers will see that.
A great CIM reveals value. It can’t create what the business hasn’t built. So before 2026 ends, start building the story you want buyers to believe in 2027.
Ask yourself:
Why is this business attractive?
Why would a buyer want to own it?
What makes it difficult to replicate?
Where is the growth?
What’s held the company back from growing faster?
What could a buyer do with more capital, more sales resources, better technology, or broader distribution?
What makes the customer base sticky?
What makes the employees valuable?
What would make this company a platform, bolt-on, or strategic acquisition target?
Then do something even more important: prove it.
If you believe there’s a growth opportunity, start showing evidence now. Launch the marketing initiative. Improve the sales process. Renew the important contracts. Track the pipeline. Test the new market. Document the recurring revenue. Measure customer retention. Show margin improvement.
Buyers are skeptical of growth stories that only exist on paper. If there's no evidence you've started pursuing the opportunity yourself, they'll price it as their upside, not yours.
If you want credit for growth potential, make it credible before going to market.
5. Fix the Value Killers Buyers Will Use Against You
Every business has issues. The question is whether you identify and address them before buyers do.
Some of the most common value killers include:
Customer concentration.
Weak management depth.
Declining revenue.
Poor margins.
Messy books.
Too much owner dependency.
No recurring revenue.
Outdated systems.
Employee turnover.
Vendor concentration.
Unresolved legal issues.
A weak sales pipeline.
No documented processes.
No clear growth strategy.
You don’t need to fix everything before 2027. But you do need to know which issues matter most and which ones can be improved quickly.
Customer concentration is a good example. If one customer accounts for 35% of revenue, you may not be able to fix that entirely within six months. But you can begin reducing the risk. You can renew the contract. Expand other accounts. Strengthen customer relationships across multiple contacts. Document historical retention. Show that the concentration is stable, profitable, and defensible.
The same is true with employee risk. If a key employee is critical to operations, you can review compensation, retention incentives, roles, responsibilities, and succession coverage before going to market.
What matters to buyers is how those problems are managed. Ignoring value killers gives buyers ammunition for a lower multiple, more restrictive terms, a larger escrow, an earnout, or a seller note. Addressing them proactively preserves your leverage.
There’s a real difference between a buyer uncovering a problem you hid and a seller disclosing a risk you’ve already managed. The first one erodes trust. The second one builds it.
That difference can matter a lot.
6. Understand Working Capital, Debt-Like Items, and the Real Walk-Away Number
The purchase price isn’t always the amount you walk away with. This surprises many first-time sellers. A buyer may offer a headline number, but the final proceeds can be affected by debt, taxes, transaction fees, working capital adjustments, escrow, seller financing, earnouts, equipment leases, unpaid liabilities, and other deal-specific items.
Working capital is one of the biggest sources of confusion. In most transactions, the buyer expects the business to be delivered with a normal level of working capital. That may include accounts receivable, inventory, prepaid expenses, accounts payable, and accrued expenses. Depending on the deal, cash and debt may be treated separately.
If you’re not prepared, you may think you sold the business for one number, only to discover that the final cash at closing is meaningfully different.
Before 2026 ends, review:
Accounts receivable aging.
Inventory quality and obsolescence.
Accounts payable.
Accrued expenses.
Customer deposits.
Deferred revenue.
Equipment loans.
Vehicle loans.
SBA or EIDL obligations.
Tax liabilities.
Lease obligations.
Customer credits.
Warranty exposure.
Any unusual balance sheet items.
You should also understand whether your business has seasonal working capital swings. A company that needs more cash at certain times of the year may require a more thoughtful working capital analysis.
Why does this matter? Because buyers care about Day One. They want to know the business will have enough operating capital after closing. Lenders care about this too. If the business is undercapitalized, the buyer may struggle immediately, which creates risk for everyone.
If you don’t understand working capital before going to market, you may negotiate the wrong deal, misunderstand the offer, or get surprised late in the process.
And late surprises are expensive.
7. Build the Right Team Before the Pressure Starts
The time to assemble your deal team isn’t after a buyer appears. By then, the clock is already running. Buyers are asking questions. Attorneys are reviewing documents. Accountants are digging through financials. Lenders may be involved. Employees may be getting suspicious. And every delay creates friction.
That’s not when you want to be interviewing attorneys, explaining your business to a CPA who’s never worked on a transaction, or trying to figure out whether your financial statements actually support your asking price.
If you’re serious about selling in 2027, use the rest of 2026 to get the right advisors around the table.
That may include an experienced M&A advisor or business broker, a transaction attorney, a CPA who understands deal accounting and tax planning, a financial planner, and possibly an estate planning attorney. Depending on your industry, you may also need help with environmental, regulatory, HR, real estate, benefits, or lending issues.
The key is experience.
Selling a business is different from running one. It’s also different from preparing a tax return, drafting an ordinary contract, or negotiating a lease. You want advisors who understand valuation, deal structure, working capital, due diligence, representations and warranties, confidentiality, buyer psychology, and the emotional weight of the decision you’re about to make.
When I sold my own company, EthiCare Advisors, the team around me caught things I wouldn't have seen on my own, and they kept the process moving when it easily could have stalled. That's what good advisors do. A weak team, on the other hand, can slow momentum, create unnecessary conflict, overlook important issues, or allow problems to surface too late. By then, your leverage is already gone.
That team is also part of how you show up. Once your business is in the market, buyers are watching how quickly you respond, how organized your records are, how clearly you explain the business, and how professionally the process is managed. The sellers who have that dialed in create confidence. The ones winging it create doubt.
And in a business sale, doubt is expensive.
What Happens If You Do Nothing?
Some owners will read this and think: I’ll deal with it next year. That may work. But it may also cost you.
If you wait until 2027 to prepare, you may still sell your business. But you may sell it with less leverage, less confidence, and fewer options.
Here’s what can happen when owners wait too long:
The valuation comes in lower than expected.
The business isn’t ready for market.
Financial cleanup delays the process.
Buyers find issues the seller should have fixed.
The best buyers pass.
The remaining buyers push harder on price and terms.
The deal shifts from cash at closing to seller financing or earnouts.
Due diligence becomes more stressful than necessary.
The owner has to stay longer than planned.
The sale gets delayed, retraded, or abandoned.
The biggest danger is that you lose control of the process entirely. Early preparation puts you in control of the story, the improvements, the timing, and how risks are addressed. Waiting too long hands that control to buyers.
And buyers are very good at using uncertainty to their advantage.
Your 2026 Exit Planning Checklist
If you want to sell in 2027, here’s your end-of-year checklist:
Get a realistic pre-sale valuation.
Calculate your likely after-tax proceeds.
Clean up financial statements and add-back documentation.
Review customer concentration and revenue quality.
Reduce owner dependency.
Document key processes.
Strengthen the management team.
Identify legal, tax, HR, environmental, or regulatory issues.
Review working capital and debt-like items.
Build a credible growth story.
Prepare the materials needed for a strong CIM.
Choose your M&A advisor, CPA, attorney, and financial planner.
Start thinking seriously about life after the sale.
That last point matters more than you might expect. Selling your business is about moving toward something, not just walking away from what you built. Retirement. Family. Travel. A new venture. Philanthropy. Investing. Consulting. Peace of mind. Freedom.
The clearer you are about what comes next, the better decisions you’ll make during the sale process.
Final Thought: 2027 Will Reward the Owners Who Prepare in 2026
Six months go by fast. The work you do between now and December will shape the deal you get, the terms you live with, and how you feel about the whole thing when it's over.
At HartmannRhodes, we help owners of companies typically valued between $1 million and $25 million prepare, position, and sell their businesses. If 2027 is on your radar, let's start with a confidential pre-sale valuation and readiness review so you know where you stand, what needs work, and how to improve your odds of a successful exit.
You only sell your business once. Make it count.
If 2027 is your target, now is the time for a confidential pre-sale valuation and readiness review.
Frequently Asked Questions1. If I want to sell my business in 2027, when should I start preparing? Now. If 2027 is your target exit year, the second half of 2026 is your leverage window. This is when you clean up financials, reduce owner dependency, address value killers, understand your walk-away number, and build the buyer story that will appear in the Confidential Information Memorandum. Waiting until you're ready to go to market may feel efficient, but it usually gives buyers more power. The more uncertainty they find, the more they push for a lower price, seller financing, an earnout, a larger escrow, or a longer transition period. Preparation helps you enter the market with fewer surprises and more control. 2. Why do I need a pre-sale valuation before going to market? A pre-sale valuation helps you understand what your business is realistically worth before buyers start reacting to it. More importantly, it helps identify what's driving value up or down, what a buyer may challenge, and what changes could improve your price or deal terms. Many owners have a number in mind, but the market may see the business differently. A serious pre-sale valuation should look beyond a simple multiple and consider adjusted earnings, revenue trends, margins, customer concentration, management depth, working capital, growth prospects, and buyer demand. It should also answer the personal question that matters most: will the after-tax proceeds support the life you want after the sale? 3. Why do clean financials matter so much in a business sale? Because buyers, lenders, and their advisors will scrutinize every number you present. Financial statements that work for tax filing or internal management may not hold up under transaction-level review. Buyers want to know what the business actually earns. Lenders want to know if the cash flow supports the debt. Everyone involved will want to understand your add-backs, adjustments, margins, and trends. One thing that catches many sellers off guard: your CPA's job is to minimize your tax burden, and that's good tax advice. The expenses your CPA told you to run through the business may be perfectly legal, but they may not be defensible as clean add-backs in a deal. If you can't explain and document an adjustment when a buyer's accountant asks about it, it'll cost you money at close. The earlier you clean this up, the stronger your position. 4. What does "reducing owner dependency" really mean? It means making the business less reliant on you personally. Buyers want to know the company can perform after you leave. If you manage every key customer relationship, approve every decision, solve every operational problem, and hold all the institutional knowledge, a buyer will see the business as riskier. You don't need to disappear from the business overnight. But before going to market, start documenting processes, delegating customer relationships, strengthening management, training employees to make decisions, and identifying a second-in-command. Buyers are really paying for confidence that the business can continue to perform after closing. 5. Why is the buyer story so important before the CIM is written? The CIM is the marketing book for the sale of your business, but it can only tell the story the business supports. If the growth story is vague, the financials are messy, or the company is too dependent on the owner, the CIM can't make those issues disappear. Before going to market, be able to clearly explain why the business is attractive, what makes it hard to replicate, where the growth opportunities are, why customers stay, and what a buyer could do with more capital, sales resources, technology, or distribution. Even better, start proving those points before buyers ask. Buyers give more credit to growth opportunities when there is evidence behind them. 6. What can reduce my actual walk-away number after the sale? The purchase price is not always the amount you take home. Your final proceeds may be affected by taxes, debt, transaction fees, working capital adjustments, escrow, seller financing, earnouts, equipment loans, unpaid liabilities, customer deposits, deferred revenue, tail insurance, and other deal-specific items. Working capital is a common surprise for first-time sellers. A buyer may expect the business to be delivered with a normal level of accounts receivable, inventory, prepaid expenses, accounts payable, and accrued expenses. If you don't understand those expectations before negotiating, you may focus on the headline price and miss the number that matters most: what you actually walk away with at closing. 7. When should I start putting my deal team together? Before you need them. The worst time to be interviewing attorneys, explaining your business to a CPA who's never worked on a transaction, or figuring out whether your financial statements support your asking price is after a buyer is already at the table. By then, the clock is running, and every delay creates friction. A strong deal team typically includes an experienced M&A advisor, a transaction attorney, a CPA who understands deal accounting and tax planning, and a financial planner. Depending on your situation, you may also need help with estate planning, environmental issues, HR, or real estate. The key is finding advisors who've been through the process before and understand how deals actually work, not just how contracts or tax returns get prepared. |
Mark Hartmann is a former business owner turned M&A advisor—and the author of Sweat Equity Payday—who knows firsthand what it takes to build, grow, and sell a successful company. A three-time Inc. 5000 CEO honoree, he led his own eight-figure sale and now helps business owners sell companies worth $1M to $25M. Mark understands that selling a business is personal, not just financial. That’s why he works closely with owners to maximize value, protect their legacy, and transition on their terms.
He holds an MBA from Eastern University and a master's degree in organizational change management from St. Elizabeth University, as well as Certified M&A Professional (CM&AP), Certified Business Intermediary (CBI), Certified Exit Planning Advisor (CEPA), and Certified Value Builder (CVB) credentials.
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HartmannRhodes advises owners of companies typically valued between $1–$25 million. If you’d like a structured pre-sale valuation review and a readiness roadmap, we can walk you through the process and tailor it to your timeline and goals. Contact us today!