The 24-month exit prep timeline: what to do each quarter
The owners who walk away at the top of their industry's range did the work in a specific order on a specific calendar. The calendar is roughly 24 months. The order matters as much as the work itself, because every quarter unlocks the one that comes after it. Skipping a step is what produces a discounted price, not a faster sale.
Most owners hear "24 months" and assume the timeline is padded. It is not. Twelve months is enough time to clean up the financials. Six months is enough time to run a process. The other 18 to 12 months are what produce the price difference between a clean sale at a fair number and a clean sale at a top-of-range number. They are about value, not about cleanup.
What follows is the timeline as it actually runs. Eight quarters, each with one main job, one supporting job, and one deliverable that has to be on paper before the next quarter starts.
The eight quarters
Q1 · Discover
Commission a current third-party valuation. Run the wealth-gap math. Identify the top three value drags on the business (typically some combination of customer concentration, owner dependence, margin quality, and management depth). Begin a written one-page personal plan for life after the business.
Deliverable on file: current valuation, wealth-gap number, top three value-drag priorities.
Q2 · Assemble the team
Form a formal advisory team: CPA, attorney, financial advisor, and an exit planning advisor as the convener. Schedule a meeting cadence (monthly is plenty at this stage). Pick the first 90-day value driver sprint with one risk-track item and one growth-track item.
Deliverable on file: advisory team roster, recurring meeting schedule, written 90-day sprint plan.
Q3 · First value driver sprint
Execute the chosen risk-track item (concentration reduction, documentation, key-person backup, buy-sell agreement update) and the chosen growth-track item (margin expansion, recurring revenue, management hire). Each priority has an owner who is not you and a single milestone due by quarter end.
Deliverable on file: signed-off sprint review with measurable progress on both tracks.
Q4 · Personal readiness work
This is the quarter most owners skip and most owners regret skipping. Build out the personal plan from a one-pager into a real picture of life on the other side: how time gets used, who you spend it with, what the money is for, what role (if any) you want with the business post-close.
Deliverable on file: written personal plan and an updated wealth-gap calculation using current valuation.
Q5 · Second value driver sprint
Second 90-day sprint on the same priorities (if still in progress) or the next-highest drag. The trailing-twelve-month financials that will go to a buyer at month 12 from here onward should start to reflect the work from Q3 and Q5 visibly.
Deliverable on file: updated valuation and refreshed buyer-perspective scorecards.
Q6 · Books and diligence prep
Move to accrual-basis monthly close if you are not already there. Run a sell-side Quality of Earnings to surface every add-back that will be cut and to clean working capital, revenue recognition, and customer concentration disclosure. Inventory legal, IP, and HR documentation.
Deliverable on file: sell-side Q-of-E report, normalized monthly P&L, working capital target, diligence binder.
Q7 · Go-to-market preparation
Engage a sell-side M&A advisor or investment bank. Build the confidential information memorandum and one-page teaser. Build the buyer universe (logical strategics, fit-targeted financial buyers, family offices). Decide on process type: targeted approach, limited auction, or broad auction.
Deliverable on file: CIM, teaser, buyer universe with first-round outreach plan.
Q8 · Process and close
Initial outreach. Indications of interest. Management presentations with shortlisted buyers. Letter of intent negotiation. Buyer-side Q-of-E (now compressed because your sell-side Q-of-E pre-cleared the issues). Definitive agreements. Closing.
Deliverable on file: signed LOI, executed definitive agreements, closing memorandum.
What if you have less than 24 months?
The eight-quarter version is the ideal. Many owners do not have it, either because circumstances forced an earlier decision or because the decision was made on a shorter horizon by choice. The work does not disappear. It compresses.
12 to 18 months
Collapse the first four quarters into the first two. Discover, team, first sprint, and the personal plan all happen between now and month 6. Months 7 through 12 become books prep, sell-side Q-of-E, and the start of go-to-market. The chief casualty is usually the second value-driver sprint, which means the trailing twelve months will not show as much of the improvement to the buyer. Expect a slightly lower multiple, partly offset by the speed.
6 to 12 months
This is the most common timeline for owners who realize too late that they want to be out. The work that survives is: a current valuation, a defensible add-back list, clean monthly accrual books, and a competent sell-side advisor. Skip the value-driver sprints entirely; you do not have time for the trailing twelve months to reflect them.
Under 6 months
This is usually a forced-sale environment (one of the 5 Ds, a health event, a family situation). The work shifts away from value creation entirely and toward minimizing the haircut. Engage a competent M&A advisor immediately. Have the contingency conversation with the advisory team about whether a partial liquidity event (recap, minority sale, sale to management) is a better answer than a full sale on this calendar.
What if you have more than 24 months?
The best position to be in is having more than 24 months. The right move is not to take a vacation. It is to use the extra runway for additional value-driver sprints, additional management depth, and additional consistency in the trailing-twelve-month financials. Three years of compounding work usually translates into a meaningfully higher multiple. Five years of it can change the multiple by a turn or two.
Owners who run the value acceleration cycle continuously, regardless of an active sale plan, end up able to sell at any time on their own terms. That is the real point of doing this work on a 24-month calendar: you stop being forced and start being free to choose.
What to do this week
- Pick the date. Choose a target month for closing. It can be the date you actually want, or just an honest aspirational date. Write it down.
- Count back 24 months. That date is when Q1 should have started. If it is in the past, you are inside the timeline; if it is in the future, you have runway to extend value-creation work.
- Identify which quarter you are actually in. Be honest. Most owners are at least one quarter behind where they think they are.
- Pick the one deliverable from the current quarter that is missing, and assign it an owner and a 30-day target.
- Schedule the next advisory-team meeting on this exact topic. If you do not have an advisory team yet, that is the Q2 work and it is the place to start.
None of these steps commits you to a sale. They commit you to having the option.
Sources: Practitioner synthesis of lower-middle-market sale-preparation cadences as commonly run by exit planning advisors and sell-side M&A banks. Cross-referenced against Christopher Snider, Walking to Destiny (Exit Planning Institute, 2016) and the Exit Planning Institute Certified Exit Planning Advisor curriculum. Examples and commentary are the work of the Next Chapter Wealth editorial team.