So my wife and I have started talking about selling the family plumbing supply place in the next 3-5 years. I keep hearing "get your business ready" but what does that actually mean in practice? We're profitable, been around 22 years. I know I can't just slap a listing on a broker site and call it a day. What are the real first steps? Where do people even start without paying for a consultant right out of the gate?
exit planning
Getting your business ready to hand over
First thing: get your books clean. Like, painfully clean. No weird personal expenses running through the company, no cash stuff that isn't documented. A buyer will pick apart every line item. You don't need a consultant to start — talk to your accountant first.
22 years in plumbing supply? Man, I bet you've got customer relationships that are worth more than your inventory. That's actually your biggest selling point. Start documenting those accounts — who buys what, how often, anything sticky. Buyers pay for recurring revenue, not just a warehouse of copper fittings.
Hire a consultant. I know you said you don't want to, but a good one pays for themselves. That said, if you really want to DIY it, look up "business readiness checklist" on any brokerage site. It's not secret info.
lol @ "slap a listing on a broker site" — the number of 60-year-old owners Who do exactly that and then get offeers at like 1.2x EBITDA because everything is a mess. Anyway. +1 to clean books. Also, get your leases and supplier contracts in order. Are any of them in your personal name? That's a common snag.
That lease thing is a real worry. One of our warehouse leases is still in my name personally from when I bought the building next door and leased it back to the company. Sort of a handshake deal with myself. Guessing that needs to be cleaned up?
Yeah, that needs to be a real lease at market terms, or at least a clearly documentd arrangement. A buyer doesn't want to inherit a handshake deal with the seller. Talk to a lawyer too, not just an accountant. You don't have to hire a full M&A firm for this, just a decent business attorney who's done a few deals.
Also start thinking about whether you want to stay on for a year after the sale. A lot of buyers want the owner to stick around for a transition period, especially with long-time customers. That can be a deal sweetener, but it Means your handover needs to be planned, not just your exit. Two different things, honestly
Out of curiosity, what's the business actually wortb to you? That kind of sets the whole strategy. If you want a number you can retire on, you might need to hold out a few years and grow it. If you just want out clean, well — different checklist.