The three years before the sale

The situation

Two founders, twelve years in, profitable, with a clear personal three-year horizon to exit. The firm had a fine reputation locally, a heavy concentration on three accounts (one of which represented ~38% of revenue), and very little documentation of how anything actually worked. Several of the senior associates were excellent practitioners but had never been given the operating layer of the firm.

The founders had been advised — correctly — that most owner-led sales fail diligence, not negotiation. They wanted three years to make the firm one a buyer could read in a week.

Most exit timelines are wrong by two years. The owners think they have twelve months; the buyer’s diligence will take eighteen months of unwinding.

The work

This was a long engagement — 32 months across three phases.

Year one: structural. A full diagnostic and a strategy document the leadership team could run. Concentration risk addressed via two new senior hires aimed explicitly at diversifying client mix. Revenue concentration on the top client moved from 38% to 19% across the year by adding revenue, not losing the client.

Year two: operational. Full documentation of the firm’s recurring engagement shapes — not as templates, but as decision documents that explained the why. Pricing model rewritten to remove the historical “founder discount” that had distorted margin reporting for years.

Year three: diligence-ready. Three sets of mock diligence — one self-administered, one run by an external advisor we trusted, one run by the firm’s audit partner. Findings closed before any buyer was approached. Financial story tightened to three clean years of consistent management accounts.

The outcome

The firm went to market in month 27. The buyer’s diligence ran eight working days. No retrades on the offer. Sale completed in month 30 at a multiple inside the founders’ target range, with both founders staying on through a 12-month transition.

The metric we care most about: from the buyer’s first question to signed SPA, zero deal-significant findings emerged. Diligence confirmed what the data room said.

What we learned

The three-years-before-exit work earns the valuation difference. The work to get from “we should think about selling” to “we are diligence-ready” takes longer than founders ever expect. Booking the work two years too early costs nothing. Booking it one year too late costs millions.