Thinking About Selling in 3 Years? Start Fixing Your Financials Today
- CPA by Choice
- Aug 6, 2025
- 3 min read
If selling your business is on the horizon, even if it's still a few years away, there’s one critical thing you need to start working on today: your financials.
Many small business owners wait until they’re ready to list before addressing their books. That’s a big mistake. The truth is, your financial records are one of the first things prospective buyers will scrutinize. Clean, accurate, and transparent financials can make or break a sale. The earlier you start, the smoother and more profitable your exit can be.
Why You Need to Start Now
1. Financial Clean-Up Takes Time
Fixing your books isn’t a one-week project. It takes time to correct errors, implement new systems, and generate a consistent track record of clean reports. Buyers typically want to see at least 2–3 years of reliable financial history. Starting now ensures you’ll have that record in place when it’s time to sell.
2. Boost Your Business Valuation
Your business's value is heavily influenced by its earnings, cash flow, and financial health. Unorganized or incomplete books can lead to lower offers, or drive buyers away entirely. Strong financials give you leverage in negotiations and help justify a higher asking price.
3. Reveal Hidden Opportunities (or Red Flags)
When you dive into your numbers, you may find expenses to cut, inefficiencies to fix, or revenue opportunities to pursue. These improvements can grow your bottom line, making your business more attractive to buyers. On the flip side, cleaning your books early allows you to address any red flags proactively, before a buyer uncovers them.
Key Steps to Take Now
1. Get Help from a Pro
If you're not working with a bookkeeper or CPA, now’s the time to bring CPA by Choice in. We can help you set up or clean up your accounting system, ensure your reports follow standard practices, and prepare you for the due diligence process.
2. Separate Business and Personal Expenses
This is a common issue among small businesses, and a big red flag for buyers. Keep your personal and business finances separate, and stop running personal expenses through the business. It not only simplifies your records but also paints a clearer picture of true profitability.
3. Focus on Key Financial Statements
Buyers will want to see:
Profit & Loss statements (monthly and annual)
Balance sheets
Cash flow statements
Tax returns
Work with us at CPA by Choice to ensure these documents are accurate, up to date, and reflect the real health of your business.
4. Document Everything
Make sure you can support the numbers in your financial statements with detailed documentation: receipts, contracts, payroll records, etc. Transparency builds trust with potential buyers and speeds up the due diligence process.
5. Create a Plan to Maximize Profitability
Use your cleaned-up financials as a roadmap. Where can you increase margins? Reduce overhead? Build recurring revenue? Improvements you make today will have a compound impact on your valuation down the line.
The Bottom Line
If you’re thinking about selling your business in three years, don’t wait until year two-and-a-half to get your books in order. Start now.
Strong financials are more than just numbers, they tell the story of your business. The clearer and cleaner that story is, the more appealing it becomes to buyers. Give your future self the best chance at a smooth, successful sale by putting in the work today. Find out how our professionals and personalized services can save you time, money, and set you up for the future. We are available to answer your questions, feel free to call us or send us a message.
Comments