The short answer
The price of a company is not set in the negotiation but in the twelve months before it. Anyone who starts tidying up once an interested buyer is at the table negotiates from a position in which every finding works against them: it costs price, time, or both.
Exit readiness is therefore not sale preparation in the sense of packaging. It is the creation of three properties a buyer tests before talking about money: the numbers agree with each other, the earnings can be explained, and the business works without the seller. Everything else follows from those.
Why twelve months
The figure is not a textbook rule of thumb; it follows from the timelines of the work itself. A quality of earnings analysis needs at least 24 months of consistent historical data – and if reporting has to be changed first, that series does not come into being retroactively. A vendor due diligence takes six to twelve weeks, and its findings then need time to be fixed. A data room takes six to ten weeks. And dependence on the owner cannot be dissolved in a quarter.
Anyone with less time can still sell. They simply sell at a price in which the buyer's uncertainty is already priced in.
Months 1 to 3: the numbers
What comes first is not a report but a reconciliation. Monthly reporting, statutory accounts and the plan have to state the same figure the same way. That sounds obvious and is rare in practice – and a buyer who finds three numbers for the same revenue checks everything twice from that moment on.
- A reconciliation from reporting to statutory accounts for the last two to three years, documented, with every difference explained.
- Revenue by dimension: customer, product, region, recurring versus one-off. Every buyer asks for this analysis in week one.
- Working capital as a monthly series over at least 24 months, including seasonality. It later forms the basis of the normal level against which the price is adjusted.
- Net debt including all debt-like items: leases, pension commitments, unpaid bonuses, shareholder loans.
Months 4 to 6: adjustments and the data room
Now the EBITDA normalisation is built – with evidence, not as a list. Every item needs proof and a reason why the effect will not recur. Items without evidence are struck out in the review, and with them the corresponding part of the price.
The data room is built in parallel. The effort is rarely in the uploading; it is in the gathering: contracts that exist only verbally, shareholder resolutions never minuted, licences with no proof of purchase. Closing those gaps takes weeks – during a live process it takes too long.
The same phase is where the non-financial topics that nonetheless determine the price belong: customer concentration, dependence on key people, unresolved litigation, an owner who is operationally irreplaceable.
Months 7 to 9: review and equity story
Anyone heading into an auction commissions a vendor due diligence now. Anyone who does not should run the same review internally – the question is not whether the findings exist, but who sees them first.
At the same time the plan that will be negotiated takes shape. It has to be derivable from history: every growth assumption needs a driver that can be found in past numbers. A plan that jumps for no visible reason will be cut by the buyer – and the cut works through the multiple.
Months 10 to 12: the process
Only now begins what many take for the beginning: approach, information memorandum, indicative offers, due diligence, negotiation. What the finance function supplies in this phase is above all speed. Buyer questions answered robustly within 48 hours keep the process moving; questions that sit for two weeks create doubt about everything else.
What matters is that the running business does not dip during this time. A drop in earnings during a transaction is the classic trigger for renegotiation – and it frequently arises precisely because management is busy with the sale.
The five findings that regularly cost money
- Revenue recognition. Prepaid services booked as revenue. In subscription models the most common finding of all.
- Working capital at the cut-off date. A receivables balance unusually low exactly at the valuation date, or supplier payments that were pushed out. Both show up immediately in the monthly series.
- Adjustments without evidence. A list of one-off effects nobody can prove.
- Key-person dependence. Customer relationships, price negotiations or technical knowledge that hang on one person – usually the seller.
- Deferred investment. Maintenance, IT, replacements postponed to lift the margin in the short term. A buyer adds them back.
None of these is in itself an accusation. They become expensive when the buyer finds them and the seller did not know.
Why the role is often filled externally
Exit preparation is additional load on a finance function already fully occupied by day-to-day work. It runs for nine to twelve months, then stops, and it calls for experience of a process a company ideally goes through once. There is also a question of interest: the person running the process is working towards their own exit from it.
That is the constellation in which an interim CFO or CFO as a Service is the usual answer – time-limited, with transaction experience, without stopping the running business. Day rates in transaction-related mandates sit above the market average; the ranges are on our pricing page.
Frequently asked questions
How long does preparing a company sale take?
Realistically twelve months to the start of the process. The period follows from the work: 24 months of consistent historical data, six to twelve weeks for a vendor due diligence, six to ten weeks for the data room, plus time to fix what those surface. A sale with less lead time is possible, but more expensive.
What does a buyer look at first?
The bridge from audited earnings to adjusted EBITDA, revenue by customer and recurrence, and the working capital series. Those three analyses decide whether the rest of the review runs relaxed or suspicious.
Do you need a vendor due diligence?
In an auction with several bidders and in a carve-out, almost always, because otherwise each bidder commissions the same work separately. In a bilateral transaction with one interested party, internal preparation along the same questions is often enough.
What is the most common reason for a price reduction?
Findings on earnings quality: adjustments that are not evidenced, revenue recognised too early, and working capital that looks better at the cut-off date than through the year. Because the price is built on a multiple, every EBITDA correction is magnified.
Does the owner have to stay after the sale?
That is a matter for negotiation, but the starting position is decided by the lead time. The more customer relationships and operating decisions hang on one person, the longer the transition period demanded and the larger the share of the price tied to later conditions.
What does the preparation cost?
External costs – vendor due diligence, data room, legal advice – depend on size and complexity. The larger item is usually finance capacity over nine to twelve months. Both are measured against the leverage: at a multiple of eight, an adjustment of EUR 200,000 moves the price by 1.6 million.
Read on
- Quality of Earnings – what is examined and which findings recur.
- EBITDA normalisation – which adjustments hold and which are struck out.
- Vendor due diligence – when it pays and what the report contains.
- Data room – structure, access phases and the role of disclosure.
- Carve-out financial statements – when a unit without its own history is sold.
- Interim CFO references – mandates including exit preparation and transaction support.
Sources and status
This article draws on nugrow's mandate practice in transaction and preparation projects and on the procedures set out in the linked glossary entries. Day rates: DDIM market study 2026 and the ranges on the nugrow pricing overview. As of September 2026. This article is an overview and does not replace legal or tax advice.
