How to Prepare for a Business Valuation: Checklist for Owners
Authored by: Ryan Weber — Partner, CPA, CVA | Date Published: December 15, 2025
You’ve built something remarkable. Whether you’re considering selling your business, bringing in investors, planning your exit strategy, or simply want to know what you’ve created is truly worth, getting a professional valuation is one of the smartest moves you can make.
The valuation process doesn’t have to feel overwhelming. Yes, it’s detailed work, but when you come prepared, you’ll get a more accurate number and make the whole process surprisingly smooth. Think of this checklist as your roadmap to showcasing your business at its absolute best.
Featured Topics:
1. Financial Document Preparation
Your numbers tell an important part of your story, so let’s make sure they’re ready to shine. Your valuation analyst will look into your financial history, so having these documents organized and accessible will save everyone time and solve problems.
What you’ll need:
Historical Financial Statements: Pull together your income statements, balance sheets, and cash flow statements from the last 3-5 years. These show how your business has performed and grown over time.
Current Financial Snapshot: Grab your most recent month-end or quarter-end statements. This shows where you stand right now.
Tax Returns: For the same 3-5 year period as above.
Capital Expenditures: Create a list of major equipment or asset purchases. When did you buy that new piece of equipment? How much did it cost?
Debt Documentation: Round up everything related to loans, lines of credit, and financing agreements. The analyst needs the full picture of your obligations.
2. Financial Statement Normalization
Normalization is the process of adjusting your historical financial statements to reflect the anticipated financial performance of the business under new ownership.
Key Areas to Address During Normalization:
Owner’s Compensation: Document all salaries, bonuses, and benefits paid to owners and their family members.
Non-Recurring/Extraordinary Income or Expenses: Identify any one-time events that skew the results, such as a large, one-time gain from selling a piece of equipment, or a significant legal settlement expense.
Non-Operating Assets and Liabilities: Separate assets and liabilities not essential to day-to-day business operations, such as excess cash reserves, real estate held by the business but not used in operations, or investments in non-core businesses.
Related-Party Transactions: Any financial transactions between the business and its owners or other businesses owned by the same party.
Out-of-Period or Accounting Changes: Adjust for issues such as revenue from multiple periods being recorded in one month due to timing, or significant changes in accounting practices.
3. Key Operational & Business Metrics
Numbers alone don’t tell the whole story. Your analyst needs to understand the engine that drives your revenue and what your future looks like.
Sales and Marketing Intelligence
Customer Concentration: Who are your top 5-10 customers? What percentage of revenue does each represent? How long have they been with you? If one customer accounts for 40% of your revenue, that’s something the analyst should know.
Sales Backlog: Document all those firm orders you haven’t fulfilled yet. A strong backlog tells the analyst and potential buyers that future revenue is already lined up.
Sales Pipeline: Share your realistic sales forecast. Break it down by probability: which deals are 90% likely to close versus which are still at the 25% stage?
Your Team
Organizational Chart: Show how your company is structured and who the key players are.
Key Employee Agreements: Non-competes, non-solicitation clauses, employment contracts for critical staff.
Management Bios: Highlight your leadership team’s experience. A strong management team can boost confidence in your business’s future.
Legal Foundation
Governance Documents: Operating agreements, bylaws, and other documents that define how your business operates.
Material Contracts: Any major agreements with suppliers, customers, or landlords.
Litigation Status: Any pending or current legal issues need to be on the table.
4. Asset and Liability Documentation
Accurate valuation requires a clear understanding of the company’s tangible and intangible assets, including the equipment value and intellectual property.
Fixed Assets and Equipment: Create a detailed schedule showing what you own: machinery, vehicles, computers, furniture. Include the original cost, purchase date, and current book value. For specialized or expensive equipment, consider getting an independent appraisal. The current market value might be different from what’s on your books, and this can work in your favor.
Real Estate: If you own your building, get a recent appraisal. If you lease from yourself, provide that lease agreement so the analyst can assess whether the terms are at market rate.
Intangible Assets: Your patents, trademarks, proprietary technology, brand reputation, and customer relationships all have value. Document them thoroughly.
Potential Liabilities: Be upfront about warranties, environmental issues, pending tax audits, or anything else that could become a financial obligation. Surprises here can derail deals or impact valuations.
5. Narrative and Strategic Information
A valuation is not simply about the numbers; it also includes the story of the business and the future of where it’s going.
Business Overview: A detailed written description of the company, including its history, mission, products/services, and target market.
Industry Analysis: Information on the competitive landscape, industry trends, and what makes you unique and better.
Outlook and Strategic Plan: Articulate your 3-5 year growth plan. Are you expanding into new markets? Launching new products? Planning an acquisition? Detail the opportunities ahead and what resources you’ll need to capture them.
Impact of Major Events: Explain any unusual events that affected your financial situation. Did COVID create a temporary boom or bust? Was there a one-time legal settlement? Help the analyst understand what’s truly representative of your ongoing business versus what was a spike.
Conclusion
Think of this preparation as your moment to let your business shine. The more transparent and prepared you are, the more credible your final valuation will be. Remember, this is about validating years of effort and getting the insight you need for your next chapter, not just reaching a specific calculation.
You’ve built the business, now let us help you define its worth. Reach out to the experienced valuation team at MBE CPAs to schedule a consultation. Together, we will reach a valuation that is accurate, defensible, and reflective of your true success.