Chapter 2: Get your business ready for sale
Get your business ready for sale: reduce owner dependence, tidy up accounts and contracts and build a data room. Good preparation means a better price.
6 min readUpdated
A buyer pays for future earnings — and for the assurance that those earnings will continue once you have left. Anything you can do to increase that assurance typically raises both the price and the likelihood that the deal goes through. Preparation can usefully start 1–3 years before the sale, but even a few months of targeted tidying up makes a noticeable difference.
Make the business independent of you
The biggest problem in many small and medium-sized businesses is that the owner is the business. The owner knows all the customers, writes all the quotes, has access to all the systems and is the only one who knows how everything fits together. For a buyer, that is a significant risk: what happens when you are no longer there?
How to reduce owner dependency
- Delegate customer relationships: Let an employee take over contact with the most important customers, and introduce that person as their regular contact.
- Describe the processes: Write down how orders, purchasing, production, customer service, invoicing and marketing work. Short process descriptions and checklists are enough.
- Build a management layer: If an operations manager, foreman, sous-chef or team leader can make decisions while you are away, the business is worth more.
- Take a holiday: A real test is whether the business can run for a couple of weeks without you. Note what went wrong, and fix it.
- Personal relationships with suppliers: Make sure agreements are in writing and tied to the business, not to you personally.
- Digital businesses: Automate routine tasks, document code and infrastructure, and make sure freelancers or employees can handle operations and customer service.
Tidy up the accounts
The accounts are the foundation of the valuation and the first thing a serious buyer will want to see. Messy figures create distrust and give the buyer arguments for pushing the price down or demanding more warranties.
- Annual reports for the last 3 years are finalised and reconciled.
- Ongoing bookkeeping is up to date, and a trial balance can be produced for the current year.
- Private expenses have been kept out of the business — or can be documented and normalised (see chapter 3).
- Revenue can be broken down by product, channel, customer and month.
- VAT, withholding tax (A-skat), labour market contributions (AM-bidrag) and other duties have been reported and paid on time.
- Stock has been counted and valued consistently.
- Receivables have been reviewed, and old, unrecoverable debts have been written off.
- One-off items (e.g. a large order, a lawsuit, a move) have been noted and explained.
- For digital businesses: figures from the payment provider, webshop platform and analytics tools match the bookkeeping.
Budget and forecast
Prepare a realistic budget for the current and next year. Buyers make their own projections, but a well-reasoned budget shows that you have a firm grip on the business — and gives you a starting point for explaining the growth potential.
Review the contracts
The buyer will review all significant agreements. It is far better that you find the problems yourself now than that they surface in due diligence, where they can derail the deal or cost you on price.
- Customer agreements: Are they in writing? Do they contain change of control provisions that give the customer the right to terminate on a sale?
- Supplier agreements: Exclusive distribution, minimum purchases, price terms and notice periods. Can the agreements be transferred?
- Lease: Term, period of non-termination, right to transfer and rent adjustment. See chapter 12.
- Employment contracts: Are all employees on written contracts? Have non-compete, non-solicitation of customers or non-solicitation of employees clauses been agreed, and are they valid?
- Licences and subscriptions: Software, platforms, franchises, trademarks. Can they be transferred to a new owner?
- Financing and leasing: Loans, overdraft facilities, leasing of cars and machinery, guarantees and charges.
- Shareholders’ agreement and articles of association: Pre-emption rights, consent requirements and other restrictions that may affect a sale.
Gather the documentation
Build your data room before you need it. When a buyer has signed an NDA and wants to get started, you need to be able to respond quickly. Long response times send a signal that something is not in order. Use Sitavo’s General DD template as a starting point — it shows what buyers typically ask for.
| Area | Example documents |
|---|---|
| Company | Articles of association, register of shareholders, shareholders’ agreement, CVR extract, minutes of general meetings |
| Finances | Annual reports, trial balances, budget, VAT returns, stock list, lists of debtors and creditors |
| Agreements | Customer, supplier, lease, leasing and licence agreements |
| Employees | Employment contracts, payroll overview, organisational chart, staff handbook |
| Digital | Domain overview, hosting, codebase, accounts and access, traffic and sales data, GDPR documentation |
| Physical | Lease, inventory list, service reports, permits from authorities, insurance policies |
| Intellectual property | Trademark registrations, designs, copyright in texts, images and code |
Fix the known weaknesses
Every business has weaknesses. The question is whether you can fix them before the sale gets under way, or whether you will have to explain them. Typical examples are heavy dependence on a single customer, an expiring lease, outdated equipment, a website that hasn’t been updated in years, or outstanding matters with the authorities. If you can’t solve the problem, have an honest explanation ready, and ideally a plan.
Appearances matter too
First impressions count — both physically and digitally. Tidy the premises, get broken things repaired, and update the website, profiles and product photos. These are relatively inexpensive measures that affect how the buyer perceives the business.
Keep the business running
The most common mistake in sales processes is that the owner spends so much time on the sale that day-to-day operations suffer. Falling revenue in the middle of a negotiation can lead the buyer to renegotiate the price or pull out. So consider getting help with the practical side of the sale, and set aside fixed time for the sales process so that the rest of the week goes to the business.
Prepare the sale on Sitavo
- Start with a draft: Create the listing via Create listing. It is saved automatically as a draft and only becomes visible when you publish it. See Drafts and preview.
- Fetch the accounts from CVR: If you own a company, you can pull its annual accounts from the Danish business register (CVR) into the listing. You confirm the figures before they are used, and buyers can see the source.
- Build the data room: Put the documents in the listing’s data room, which has fixed folders for financials, traffic and marketing, technical, legal, operations and suppliers, and customers. Only buyers with an approved NDA, an accepted offer or a deal can open them. See Data room.
- Use the templates: The key figures sheet, the sales presentation and the general due diligence checklist are under Documents, so you can see what buyers typically ask for.
- Get a first indication of value: The free valuation calculator gives an indicative range you can take to your accountant. Read more in chapter 3.
Next step
Once the business has been tidied up, you are ready to set a price. Read on in chapter 3 on valuation.
Frequently asked questions
Ideally one to three years ahead if you want to reduce owner dependence and show a couple of strong financial years. If you do not have that long, even a few months of focused work on the accounts, contracts and documentation makes a noticeable difference to both price and pace.
The more the business depends on you personally, the more risk the buyer sees, and the lower the price or the larger the share made conditional. Delegate customer relationships, document processes and make sure agreements are in the company’s name.
At a minimum, annual reports for the last three years, a current trial balance, the main customer, supplier and lease agreements, employment contracts, an asset list and, for digital businesses, an overview of domains, accounts and traffic and sales data.
Fix them if it can be done with reasonable effort, such as an expiring lease or patchy bookkeeping. If you cannot, raise the issue yourself early with an honest explanation. Weaknesses the buyer finds in due diligence usually cost more in price.
Yes. A listing on Sitavo is saved as a draft until you publish it, and you can add documents to the data room and create the sales prospectus in your own time.
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Related articles
- Chapter 1: Are you ready to sell your business?Thinking of selling your business in Denmark? Clarify your motives, timing and finances before you start, and get an overview of the whole sale process.
- Chapter 3: Business valuation — what is it worth?Business valuation explained: normalised earnings, EBITDA, owner’s salary, multiples and DCF — and why the buyer ultimately decides what the price is.
- Chapter 9: Due diligence from the seller’s sideDue diligence from the seller’s side: build the data room, answer the buyer’s questions quickly and precisely, and handle findings so the deal moves on.
- Data rooms when buying a business: access, documents and AI helpHow buyers use the data room: who gets access, folders and watermarks, Ask the data room with AI, and which documents you should expect to find.