Preparing to Sell Your Business: Questions to Ask Your Before You Go to Market

Hannah Hood

If you’re preparing to sell your business, the right questions upfront can directly impact your valuation, deal terms, and how smoothly the process goes. Starting early gives you time to identify gaps, improve performance, and position your business for the strongest possible outcome.

So, what should you be asking your CFO to optimize the value of your business? Here are some key questions and focus areas to consider: 

1. Are our financial records ready for due diligence? 

New owners want clean, reliable financial statements they can trust. After all, no business owner wants to walk into hidden costs or liabilities right from the start. Therefore, one of the most important requirements for prospective buyers is to find a business with accurate financial data in place. Ask your CFO: 

  • Are all balances on the balance sheet validated? 
  • Do our financial statements reflect industry-standard accounting practices (such as GAAP and revenue recognition)? 
  • Could someone outside the company easily understand and benchmark our financials against competitors in the industry? 

High-quality financial reporting is foundational. Without it, you risk slowing down — or even derailing — the sale process. A common next step in deal prep is a Quality of Earnings (QoE) report, which helps buyers test whether your earnings are sustainable. If you want help identifying where your business stands today and what needs to improve before a sale, start with our dynamic forecasting guide—or talk with a Virtual CFO advisor.

2. Which KPIs and metrics should we be tracking? 

Metrics tell the story of your business beyond the numbers on a balance sheet. They unveil both financial and nonfinancial profit drivers within your business. At a minimum, make sure you’re tracking: 

  • Gross margin 
  • Net income 
  • EBITDA (a critical metric for most buyers across industries) 

On top of that, your CFO should help identify industry-specific KPIs — whether customer, operational, or people-related — that make sense for your business. Even more important: ask how your company’s numbers stack up against industry benchmarks. Buyers will be making those comparisons, so it’s best to get ahead. 

To understand how these metrics translate into buyer expectations, see Cash Flow Metrics to Grow Your Business.

3. Where are our biggest risks? 

Surprises are the last thing you want in a buyer conversation. A risk assessment is an invaluable tool here. By evaluating risks and liabilities early, you provide your teams with ample time to solve these issues and prevent them from decreasing market value. For example, a thorough review might cover: 

  • Legal: Do we have a buy-sell agreement? A succession plan? Are we missing any other legal documents? 
  • Insurance: Are policies adequate and up to date? 
  • Financial & Estate Planning: Are personal financial plans and wills structured appropriately? 
  • Tax: How are we managing risk around audits and tax implications? Do we have strategies in place to decrease our tax liabilities? 
  • Technology: Are we prepared for cyber threats? Do we have technology in place to amplify growth? Technology should support scalability and visibility—especially as you prepare for buyer scrutiny.
  • Banking: Are our loan terms competitive, and do we have the right lines of credit available? 
  • Valuation: Do we have a current valuation benchmarking our business against competitors in the industry? Has the valuation identified where there may be opportunities for improvement to increase market value? 

By addressing risks in advance, you’ll be better positioned and more confident during negotiations. 

4. How healthy is our cash flow? 

Cash flow isn’t just a day-to-day concern — it’s a key signal of sustainability and profitability for potential buyers. Ask: 

  • Is our cash flow predictable? 
  • Does it support the long-term business model? 
  • What trends do we see historically, and how might a new buyer interpret them? 

There are many strategies business owners can use to increase cash flow and liquidity. Utilize your cash flow forecast to identify obstacles in the way to reaching financial goals.  Many of these improvements come from aligning demand with capacity and performance—see Ideal Pipeline Size and Production Metrics to Improve Cash Flow.

5. What operational improvements should we make before going to market? 

Financials matter, but buyers also care about how the business runs. Take a critical look at operational processes and areas of weakness. Tightening these up ahead of time not only reduces risk but also makes your company more attractive and easier to transition to a new owner. 

The sale of your business isn’t just about finding the right buyer — it’s about presenting your company in the best possible light to receive the highest asking price possible. The right CFO can help you strengthen financial health, highlight the right KPIs, identify and mitigate risks, and ensure your operations support a smooth, successful transaction. 

If you don’t have a CFO in place, this is the moment to bring in an experienced financial advisor, like a skilled CPA or a virtual CFO service. The goal is to walk into buyer conversations with confidence, clarity, and a clear understanding of what your business is worth. 

Preparing your business for sale isn’t just about getting through due diligence—it’s about maximizing value before you go to market. If you want help identifying what to fix and how to improve your valuation, start with our dynamic forecasting guide—or speak with a Virtual CFO.

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