Five Things You Should Do Today in Order to Sell Your Payroll Business in the Next Three Years

If you’re thinking about selling your business within the next few years, the clock has already started ticking. Specific actions to take today can maximize value, clean up your operations, and position your company for a smooth sale. “I’ve helped acquire dozens of firms across many industries over two decades and here are some of the lessons I’ve learned getting deals over the finish line.”  Paul Altavena

Once you enter negotiations with a potential buyer, diligence and negotiation becomes a full-time effort. Steps taken today can help lighten the burden and ensure a smooth sale.  I’ve worked with buyers and sellers on dozens of deals over two decades, and here are my takeaways for potential sellers: 

Clean Up Customer Agreements 

You’ve built deep relationships with your customers. Make sure that you have documentation to prove it. Stable, repeatable revenue is the primary driver of your business. Buyers are seeking businesses that can retain their existing client base for years to come.  

• Why it matters: Contracts reduce churn risk and give buyers predictable cash flow. 

• Action step: Audit your current agreements. Ensure they’re signed, updated, and contain clear terms around pricing, renewals, and termination. If clients are on handshake deals or outdated documents, get those formalized now. 

Invest in Clean Financials and Compliance 

Too many sellers wait until a buyer requests diligence data to get organized for a sale.  Buyers will scrutinize your books, and sloppy records can slow or kill a deal. Compliance is nonnegotiable, and a buyer is seeking to minimize future risk. 

• Why it matters: Transparent financials and clean compliance records show buyers you’re a safe bet. Lack of clear historic data results in reductions to valuation.   

• Action step: Invest in CPA-reviewed financial statements, document tax filings, and stay ahead of regulatory requirements. Consider a mock audit to catch issues before a buyer does. 

Review Vendor Relationships and Contracts 

Your business depends on technology providers, accountants, HR partners, banks, tax advisors, landlords, and other vendors. Buyers will likely continue relationships with some vendors and wind down others. Contracts with onerous exit terms or that limit changes (including change of control provisions) may be challenging for you or a seller to transition.   

• Why it matters: Flexibility in vendor contracts ensures operational continuity after the sale. 

• Action step: Review vendor contracts for duration, assignability (so they transfer smoothly in a sale), and terms.  

Clean Up Your Corporate Structure 

It sounds obvious, but make sure you own your business. Messy ownership structures, outdated bylaws, or shareholder disputes can kill deals or delay closings.  

• Why it matters: Buyers don’t want to inherit legal headaches. A clean, well-documented corporate structure builds trust. 

• Action step: Review your capitalization table, shareholder agreements, and organizational documents. Eliminate ambiguities. Resolve ownership issues now rather than under the pressure of a deal. 

Build Your Network and Assemble a Deal Support Team 

When it comes time to sell, the right relationships and advisors will streamline your exit. Your existing network is the best place to start when identifying buyers. Too many owners wait until they’re ready to sell to start building these connections, which can lead to slower or derailed sales.  

• Why it matters: Buyers prefer businesses that already have professional infrastructure in place — an attorney and accountant who understand your business. A well-prepared seller with the right team inspires confidence and ensures a smoother transaction. 

• Action step: Start networking with potential buyers long before you’re ready to sell. At the same time, line up a support team of trusted advisors who can guide you through due diligence and negotiations when the time comes. 

Final Word 

Preparing your business for sale is a multiyear journey. It shouldn’t be a three-month scramble. Every seller I’ve ever worked with has remarked that the sale process felt like a full-time job. Taking these actions now will lighten the load when you’re ready to sell.  By securing client contracts, reviewing vendor relationships, tightening your financials, and cleaning up your legal structure, you position yourself for a quick, clean sale when the time comes. The best exits are built, not improvised.