Read time: 3 mins
Hey there!
A buyer is looking at a business, and the early conversations are going well.
They understand the offer, they can see why clients buy, and the future looks promising enough to keep talking.
Then the lawyer asks about the lease.
It turns out the business has been operating happily from the same premises for years, but the renewal was never properly finalised.
The owner isn’t overly worried.
“It’s always been fine.”
Which may be true.
But now the buyer has to think about what happens if it’s suddenly not fine.
Can the business stay there?
Will the rent change?
Would moving damage revenue?
Does the valuation still make sense if the location is less secure than expected?
One loose end has just become a much bigger conversation.
That’s how skeletons tend to work in a sale.
They’re often the things owners have worked around for years, without them feeling especially urgent at the time.
Then a buyer, lawyer or accountant starts looking closely, and suddenly the issue has a new weight to it.
It might not kill the deal.
But it can slow things down, create doubt, change the terms, or give the buyer a reason to push harder on price.
That’s why this is the next instalment in our Sale-Ready series.
We’ve already looked at knowing what the sale needs to do for you, aligning owners on the exit, getting your numbers in order, and making sure your team is part of the value.
This week, we’re looking at the skeletons.
Every business has a few.
The smart move is to find them early, deal with what you can, and be ready to explain what remains.
Let’s dive in!
How to deal with your skeletons when you’re selling
1. Know the awkward numbers before they ask
Financial skeletons are probably the most common.
They’re also usually less scary if you’ve already looked at them properly, understand where they came from, and can explain them before the sale process starts.
But if you’ve tried to keep something under wraps and the buyer notices, you’ve got a much bigger problem on your hands.
Here’s an example: say you have one client contributing a large share of your revenue.
That’s not necessarily a deal-breaker, but if you’re not upfront with your buyer, it can feel like you’re hiding a weakness.
When they find out, things get uncomfortable.
Say instead, you were proactive in explaining the situation.
You point it out and share details of the relationship, the retention risk, and what you’re doing to diversify.
Suddenly, it feels like a much more helpful conversation.
This is where preparation matters.
Know what your numbers are really saying.
Understand the uncomfortable parts.
Get clear on what’s improving, what still needs work, and what would need explaining in a sale.
You want to be able to say, “Yes, we know about that, and here’s how we’re managing it.”
That feels very different to trying to work it out while everyone is waiting for an answer.
2. Clean up people issues before they become buyer issues
People skeletons can feel harder to deal with because there’s usually some history attached.
Maybe there’s a contractor who has worked with you for years and feels like part of the team.
Maybe there’s a bonus arrangement that was agreed verbally, but never properly documented.
Maybe there’s a key employee who everyone relies on, but no one has really thought about what would happen if they left during a sale process.
These things can sit in the business for years without feeling urgent.
Until someone new comes in and asks for proof.
That’s when the friendly, informal, “we’ve always understood each other” arrangement can start to feel a lot less comfortable.
So, look at the people side early:
- Check employment arrangements
- Make sure entitlements are up to date
- Document anything important that currently lives in a conversation, a promise, or someone’s memory
- If there’s a key person the business depends on, think about how you would keep them engaged through a sale or reduce the reliance over time
A buyer will feel much more confident if they can see that the people side of the business is clear, fair and being managed properly.
3. Don’t rely on “it’s always been fine”
“It’s always been fine” is one of those sentences that can make perfect sense to an owner and very little sense to a buyer.
You know the supplier will look after you.
You know the landlord has always been flexible.
You know Eric is the guy who fixes the system every time it goes a little funky.
And that might all be true.
But a buyer doesn’t have your history.
They don’t have the same relationships, the same context, or the same confidence that things will keep working because they always have.
So when something important depends on goodwill, memory, or one person knowing how it works, it can start to feel like risk.
That might be a lease renewal that was never properly finalised, a supplier arrangement, a referral source, IP ownership, passwords, system access, or a process that only exists in someone’s head.
Start with the arrangements that matter most to value:
- Which relationships would make the business harder to run if they changed?
- Which agreements would a buyer expect to see in writing?
- Which processes would be painful to lose if one person left?
Then make those things easier to explain, transfer and rely on.
This might mean formalising an agreement, documenting a process, checking contract terms, clarifying who owns what, or making sure records and access are properly controlled.
It’s not glamorous work, but it makes the business easier to trust.
And when a buyer trusts what they’re looking at, they have fewer reasons to question the price, the terms, or the risk they’re taking on.
⭐ Bottom line
Every business has a few skeletons.
Some are small and annoying.
Some maybe a little bigger and scarier.
But they’re not to be ignored.
if you do, the skeleton itself is only part of the problem.
if a buyer finds out on their own, the bigger issue is whether it feels like you’re hiding that, and possibly more.
A whole deal can die that that way.
That’s why this matters.
Confronting your skeletons gives you more control, more confidence, and a much better chance of keeping the sale conversation moving in the right direction.
So start opening the cupboards now, find the skeletons, and deal with them.
Happy hunting!
Speak soon,
Lynne & Steve
P.S.
Next week, we’re wrapping up the Sale-Ready series with one final question: Would your business pass the buyer test?
We’ll pull the pieces together and look at what a buyer would really want to feel confident about before making an offer.
TLDR
- Every business has a few skeletons.
- The issue isn’t always the skeleton itself. It’s whether the buyer finds it before you’ve dealt with it.
- If you might want to sell one day, start by looking at:
- financial issues that need explaining
- people and compliance risks that should be cleaned up
- informal agreements, dependencies or loose ends that need to be made clearer
- Make sure you know what’s hiding, deal with what you can, and be ready to explain what remains.
And if you want help with this, check out our Business Consulting services page, or get in touch with us here.
P.P.S.
Know someone who’d get value from this? Feel free to forward it on, it might be exactly what they need to hear right now. 😉
