Timing the Sale: Part 6 of 6
Tax Policy, Election Cycles, and Exit Planning for Business Owners
Quick Answer: When should you start preparing to sell your business by 2028?
If you want to sell your business by 2028, you should begin preparing as early as possible, ideally in 2026. Owners who want to close in the first half of 2028 may need to complete valuation, tax planning, financial cleanup, and readiness work well before going to market. A realistic sale process can take many months, and preparation may take a year or more if the business has issues that buyers will scrutinize.
For many business owners, 2028 sounds far away.
In M&A terms, it is not.听
If an owner wants to sell a business by 2028, especially by the first half of the year, the planning process should begin much earlier. A business sale is not a single event. It is a sequence of decisions, preparation, buyer conversations, diligence requests, financing discussions, legal negotiations, and transition planning.
That sequence takes time.
More importantly, the work that creates a stronger outcome often happens before the company ever goes to market.
Owners who wait until they are 鈥渞eady to sell鈥� may discover the business isn’t ready for buyers. The financials may need cleanup. The management team may need strengthening. Customer concentration may be a concern. The owner may still be too central to daily operations. Tax planning opportunities may be limited. The owner may not yet know what the business is worth, what they would keep after taxes, or what type of buyer would be the right fit.听
That is why the best time to prepare for a future sale is before the owner has to make a final decision.
How long does it take to sell a business?
A lower-middle-market business sale can often take several months from market launch to closing. The broader process typically takes longer when including valuation, preparation, tax planning, and operational improvements.
A typical sale process may include:
- Initial valuation
- Owner goal-setting
- Tax planning
- Financial preparation
- Operational readiness work
- Buyer research
- Confidential marketing materials
- Buyer outreach
- Management meetings
- Indications of interest
- Letters of intent
- Due diligence
- Financing
- Purchase agreement negotiation
- Closing
- Post-closing transition
Some of those steps can move quickly. Others can鈥檛 be rushed without increasing risk.
Due diligence alone can be intensive. Buyers may review financial statements, tax returns, customer data, employee information, contracts, leases, equipment, legal matters, insurance, systems, processes, and growth assumptions.
If the owner hasn’t prepared for that level of review, the process can slow down, valuation can be challenged, or the deal can lose momentum.
Why 2026 matters for a 2028 business sale
If an owner wants to close by 2028, 2026 is definitely not too early to start planning.听
It may be the right time to ask three basic questions:
- What is the business worth today?
- What would a buyer worry about?
- What would I keep after taxes and transaction costs?听
Those questions reveal the work that needs to happen before going to market.听
For some owners, the business may already be close to market-ready. For others, there may be gaps that require time to address.听
Common issues include:
- Incomplete or inconsistent financial reporting
- Unclear add-backs
- Heavy owner dependence
- Customer concentration
- Weak management depth
- Limited recurring revenue
- Undocumented systems and processes
- Unresolved legal or operational issues
- Unclear growth strategy
- Unrealistic valuation expectations
These issues do not automatically prevent a sale. But they can affect buyer confidence, deal structure, valuation, and certainty of closing.
Starting in 2026 gives owners time to understand those issues before buyers use them as leverage in negotiations.
Business sale timeline听
If the goal is to close in the first half of 2028, the business may need to be ready to go to market by 2027. That does not mean the owner has to decide immediately to sell. It means the owner should begin creating the option.
Here is a practical timeline to consider.
Q3/Q4 2026: Get a valuation and assess readiness
The first step is understanding where the business stands today.
Key priorities:
- Review recent financial performance.
- Identify likely buyer concerns.
- Meet with a CPA or tax advisor.
- Begin modeling after-tax proceeds.
- Clarify personal goals.
- Evaluate owner dependence.
- Review customer concentration.
- Assess management team depth.
- Identify operational risks.
This stage is about information, not commitment.听
An owner may discover that the business is worth more than expected, less than expected, or about what they assumed. Any of those answers is useful because they allow the owner to make decisions based on reality rather than guesswork.
Q1/Q2 2027: Strengthen the business before buyers see it
Once the owner understands the value range and readiness gaps, the next step is improvement.
Key priorities:
- Address unusual expenses.
- Strengthen the leadership team.
- Review contracts and leases.
- Build a clearer growth story.
This is the stage where preparation can create value.听
Buyers pay attention to risk. If the owner can reduce risk before going to market, the business becomes easier to understand, easier to finance, and more attractive to qualified buyers.听
Q3 2027: Prepare to go to market
If the goal is to close in early or mid-2028, the business may need to be ready for the market by Q3 2027.
At this stage, the focus shifts from internal preparation to transaction readiness.听
Key priorities:
- Confirm the valuation range.
- Finalize tax planning discussions.
- Prepare confidential marketing materials.
- Define the ideal buyer profile.
- Identify strategic, financial, and individual buyer categories.
- Prepare management presentation materials.
- Organize diligence documents.
- Align the owner, CPA, attorney, wealth advisor, and M&A advisor.
- Clarify acceptable deal structures.
- Discuss employee, legacy, and transition priorities.
鈥淩eady to go to market鈥� doesn’t just mean the owner is willing to sell. It means the business, the story, the documentation, the advisory team, and the owner are prepared for serious buyer conversations.听
Q4 2027/Q1 2028: Engage buyers and evaluate offers
Once the company goes to market, the process becomes more active.
Key priorities:
- Manage buyer outreach.
- Respond to buyer questions.
- Hold management meetings.
- Review indications of interest.
- Compare offers beyond price.
- Evaluate structure, financing, contingencies, and fit.
- Select the strongest letter of intent.
- Prepare for due diligence.
This is where many owners realize the highest number is not always the best offer.
An offer with more cash at closing, better financing certainty, a stronger cultural fit, and fewer contingencies may be more attractive than a higher headline number with more risk.
Owners should consider:
- Purchase price
- Cash at closing
- Seller financing
- Earnouts
- Rollover equity
- Working capital expectations
- Buyer financing
- Employee plans
- Transition expectations
- Certainty of closing
The right buyer is not always the buyer with the flashiest offer. Sometimes the best offer is the one most likely to close and most aligned with the owner鈥檚 goals.
Q1/Q2 2028: Navigate diligence, financing, and closing
After a letter of intent is signed, the work is not over.
In many ways, the most demanding part begins.
Due diligence can be intense. Buyers, lenders, attorneys, accountants, and advisors may request detailed information about almost every part of the business.
Key priorities:
- Respond to diligence requests.
- Support quality of earnings review.
- Work through financing requirements.
- Negotiate the purchase agreement.
- Finalize tax planning.
- Address working capital, escrows, and indemnities.
- Communicate transition expectations.
- Prepare for employee and customer messaging when appropriate.
- Move toward closing.
This stage can surprise owners. Even founders who’ve run successful companies for decades may feel frustrated by the level of documentation, repetition, and scrutiny.
That is normal.
It’s also why preparation matters. The cleaner the documentation, the easier it is to keep the process moving.
What buyers look for before buying a business
Buyers aren’t just asking whether a business is profitable. They’re asking whether the performance will continue after closing.听
A business that performs well but depends heavily on the owner may face more scrutiny. A business with strong earnings but poor documentation may create uncertainty. A business with a great story but weak systems may feel risky to buyers.
Owners preparing for a 2028 sale should focus on making the business more transferable, not just more profitable.听
How tax planning fits into the sale timeline
Tax planning should not wait until the end of the process.
Owners should involve a CPA or tax advisor early enough to understand how different transaction structures may affect net proceeds. The tax impact of a sale can vary based on factors such as entity structure, basis, purchase price allocation, state taxes, seller financing, earnouts, rollover equity, and estate planning.
The earlier an owner understands those issues, the more time they may have to plan.
Tax planning should not drive the entire sale decision, but it should inform the timing, structure, and expectations.
The best time to prepare is before you have to decide
Preparing for a sale does not mean the owner has decided to sell.
It means the owner is creating options.听
An owner who starts early can decide to sell, wait, recapitalize, bring in a partner, transition leadership, or continue growing independently. An owner who waits too long may still have choices, but often with less flexibility.
For owners considering a sale by 2028, the planning window is now.
The goal is not to predict the future perfectly. The goal is to avoid being surprised by the timeline, the tax implications, the diligence process, or the market鈥檚 view of the business.
A strong exit doesn’t happen the day the owner signs the closing documents. It is built years earlier through preparation, planning, and clear-eyed decision-making.
Frequently Asked Questions
Many owners should begin preparing two to five years before a potential sale. If you want to sell by 2028, starting in 2026 can give you time to understand value, address business risks, model tax outcomes, and prepare for buyer diligence.听
A lower-middle-market business sale can take several months once the company goes to market. The full process may take longer when valuation, preparation, tax planning, buyer outreach, diligence, financing, and legal negotiations are included.听
The first step is usually to understand the current value of the business. From there, owners can identify readiness gaps, talk with a CPA about tax planning, and decide whether the company should go to market now or after additional preparation.听
A business is more ready to sell when it has clean financials, a strong management team, low owner dependence, documented systems, defensible earnings, diversified customers, clear growth opportunities, and organized diligence materials.听
No. Preparing to sell does not mean committing to a sale. It gives the owner more options, including selling, waiting, recapitalizing, transitioning leadership, or continuing to grow independently.听
Editor鈥檚 note/disclaimer: This article is for educational purposes only and should not be considered tax, legal, or financial advice. Business owners should consult their CPA, attorney, and financial advisor before making decisions related to a business sale.
Catch up on the entire “Timing the Sale” series:
1. Should Tax Policy Affect When You Sell Your Business?
2. Do Election Years Slow Down Business Sales? What Owners Should Know
3. Why Buyers and Sellers May Pause During Election-Year M&A
4. What Lenders Watch During Election-Year M&A
5. What Business Owners Should Ask Their CPA Before Selling