How Long Does It Take to Sell Your Company . And What to Do 12 Months Before You Start

The founders who get the best outcomes from M&A processes don't start preparing when they hire the banker. They start 12–18 months before. Not because the process requires it . but because 12 months of deliberate preparation can add 20–40% to your final number.

Here's the realistic timeline and the exact preparation sequence.

Realistic M&A process timeline for a $5–50M ARR company

• Preparation (months 1–3): CIM, data room, financial normalisation, management presentation
• Buyer outreach + IOI (months 3–5): Identify buyers, NDAs, initial meetings, indications of interest
• Management presentations + shortlist (months 5–7): 4–8 buyers, site visits, management prep
• LOI + exclusivity (months 7–9): Letter of intent, exclusivity negotiation, initial diligence
• Confirmatory diligence (months 9–12): Legal, financial, technical, customer reference calls
• Purchase agreement + close (months 12–15): SPA negotiation, disclosure schedules, regulatory if needed

Bottom line: Budget 9–15 months from "start" to close. 12 months is the median. Deals close faster when preparation is thorough.

What "preparation" actually means and why it matters

The cost of poor preparation:

• Buyers discover issues in diligence that should have been disclosed upfront → price chips
• Financial statements require restatement → process delays or kills
• Key customer concentrations emerge → price discount
• Legal issues (IP ownership, employee agreements, customer contracts) discovered late → earnout risk added

The value of good preparation:

• Buyers compete with better information → higher price
• Diligence completes faster → lower deal cost and distraction
• Fewer surprises → fewer price chips and deal terms re-negotiations

The 12-month preparation checklist (priority order)

Months 12–9 before process:

• [ ] Audit your financials: GAAP/IFRS compliance, accrual accounting, no cash basis quirks
• [ ] Separate owner personal expenses from business expenses (normalised EBITDA)
• [ ] IP audit: make sure all IP is owned by the company, not founders personally
• [ ] Employee agreement audit: non-competes, IP assignment agreements signed by all employees
• [ ] Key customer contracts: check for change-of-control clauses (some require consent)

Months 9–6 before process:

• [ ] Customer concentration: ideally no customer >15% of ARR
• [ ] Revenue recognition: ARR must be clean (not inflated with one-time revenue)
• [ ] Hire a CFO or upgrade financial reporting capability
• [ ] Build a 3-year financial model with realistic assumptions
• [ ] Identify your advisor: interview 3–4 M&A advisors; don't wait until you're ready

Months 6–3 before process:

• [ ] Prepare CIM draft (Confidential Information Memorandum)
• [ ] Build the buyer universe: strategic buyers, PE, adjacent industry
• [ ] Management team: document who runs what if the founder steps back
• [ ] Employee retention: key employee agreements, phantom equity, or retention packages

Months 3–0 before process:

• [ ] Data room ready
• [ ] Management presentation rehearsed
• [ ] Advisor engaged
• [ ] NDA template reviewed by legal

The single highest-ROI preparation activity

Financial normalisation. Buyers pay EBITDA multiples. Every $100K of owner-related expenses you can legitimately add back to EBITDA (personal salary above market, non-business expenses, one-time items) is worth $400–700K in additional deal value at typical EBITDA multiples.

Get your accountant to build a normalised EBITDA bridge 12 months before you start. Then run the business to that number.

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The 12-month preparation plan for your specific company depends on where you are today . not a generic checklist.

→ Book a Founder Clarity Session to build your specific plan: ExitBoard.ai/clarity → Ask My Board your prep questions: ExitBoard.ai