You’ve decided to sell your business—now what?
The process can feel overwhelming the first time you do it. Between timing, legal paperwork, buyer outreach, and financing, there are a lot of moving parts. The good news: with a clear plan, you can move from “Where do I start?” to a profitable, clean exit.
First, give yourself permission to sell. Many owners—especially founders—struggle with the idea because the company feels personal. It’s normal to exit. People sell because they’re ready for retirement, burnt out, pivoting to a new venture, or simply taking chips off the table.
Handled well, a sale can fund your next chapter and provide real financial freedom.
We’ve turned a complicated process into five practical steps you can follow right away.
Step #1: Determine Your Business Valuation
Most owners have a number in mind—often based on years of effort, not just performance. A professional valuation helps reset expectations and gives you a defendable starting point for negotiations.
Before you list too high or too low, bring in a valuation expert.
A third-party valuation provides a realistic estimate of what your company is worth today. For a fixed fee (often a few thousand dollars), a qualified appraiser will analyze your financials, growth, customer concentration, industry risk, and comparable deals, then deliver a written report you can share with serious buyers.
The report adds credibility to your asking price and helps you understand how buyers will see your business.
If you don’t want to hire an appraiser, you can estimate value yourself. Generally, there are three main ways to value a business—cost approach, market approach, and intrinsic value (discounted cash flow).
For main street and lower mid-market deals, buyers often start with earnings multiples. Smaller owner-operated businesses are typically priced off SDE (seller’s discretionary earnings); larger companies use EBITDA. Multiples vary by size, growth, margins, industry, and risk profile.
Other factors also matter—trend lines, recurring revenue, customer concentration, intellectual property, equipment and inventory, debt, and how much owner involvement is required day to day.
Remember: a valuation is a decision tool, not the final sale price. The business is ultimately worth what a qualified buyer will pay on acceptable terms.
If the number isn’t where you want it, consider a short “value-building” plan—clean books, tighter margins, reduced owner dependence, and documented SOPs can lift multiples.
Think of it like selling a home. An agent can suggest a price, but you may need light improvements to maximize value. The same logic applies to a business.
Step #2: Get Your Financials in Order
Once you know your likely range, organize your financials. Many sets of eyes will review them—buyers, lenders, accountants, and your broker—so accuracy and clarity are non-negotiable.
Expect to provide at least three years of business tax returns and clean financial statements (balance sheet, income statement, cash flow). If you run cash-basis books, be ready to explain seasonality and provide accrual adjustments when needed.
Strengthen your package with supporting schedules: AR/AP aging, inventory details, payroll, owner add-backs, major contracts, customer and vendor concentration, and any deferred revenue. Consider a light “quality of earnings” review if your deal size warrants it.
Errors, inconsistencies, or missing documentation spook buyers. Even honest mistakes invite questions and can slow or kill a deal.
Many small businesses don’t keep a dedicated accountant or bookkeeper year-round. If that’s you, we strongly recommend hiring an expert to clean and standardize your books before you list.
Create a simple data room (folder structure) with labeled documents and keep it updated. Clean, consistent financials build trust and shorten diligence.
Step #3: Hire a Business Broker
You can sell on your own, but most owners get better outcomes with a broker (or M&A advisor for larger deals). Brokers bring pricing discipline, qualified buyers, confidentiality, and a proven process.
Selling to a family member or close colleague? You might handle it yourself and save fees. For most other situations, a broker is worth it—faster sale, stronger pool of buyers, and help negotiating terms you might miss.
Brokers work on commission, so their incentives align with your sale price and a successful close. Clarify what they’ll deliver: an opinion of value, a blind teaser, a confidential information memorandum (CIM), buyer outreach, NDA management, and deal shepherding through diligence to close.
Your broker will also provide their own valuation. Compare it to your appraisal from Step #1. They won’t match exactly, but they should be close. If they’re far apart, seek a third opinion.
Other common broker responsibilities include:
- Finding and screening qualified buyers
- Marketing the sale discreetly (teaser, CIM, buyer list)
- Maintaining confidentiality with NDAs and controlled data room access
- Coordinating financing options and lender introductions
- Leading negotiations and drafting LOI terms
- Managing diligence checklists and closing timelines
Business Brokers
As a rule of thumb, higher revenue usually means a lower commission rate.
Businesses up to $1 million in revenue often pay 10–12% in brokerage fees, while companies at $25+ million commonly land in the 2.5–4.5% range. In between, many brokers use the Double Lehman model instead of a flat percentage.
Understand the commission structure up front (success fee, minimums, and whether there’s a small retainer). Ask what’s included in the fee—CIM creation, paid ads or listing fees, and how buyer leads are sourced and qualified.
Step #4: Find Pre-Qualified Buyers
Two key words here: pre-qualified and buyers (plural). Multiple offers protect you from tire-kickers and give you leverage.
Protect sensitive information. Require an NDA, a brief buyer profile, and proof of funds or lender interest before sharing detailed financials. Competitors sometimes “shop” for intel—don’t make it easy.
Most small business acquisitions involve bank or SBA-backed financing, and some include a seller note or small earnout. That means even strong offers can fall through. Stay patient and keep options open.
On average, it takes six to eight months to sell a business, and larger, more complex deals can take longer.
Common buyer types include:
- Individual buyers (often with SBA financing)
- Strategic buyers (competitors, suppliers, or customers)
- Private equity groups and search funds
Good process for offers: collect LOIs (letters of intent) that outline price, structure (asset vs. stock), financing, exclusivity period, working capital target, due-diligence timeline, and the seller’s transition support. You can use one offer to improve another—just keep it professional.
Step #5: Finalize Legal Documents and Contracts
Once you accept an LOI, the deal moves into diligence and definitive agreements. This is where experienced counsel pays for itself.
Your attorney should quarterback the documents and protect you from surprises. Expect a detailed buyer request list and many follow-up questions as lenders and attorneys review your materials.
Common documents and agreements include:
- Purchase agreement (asset or stock sale)
- Detailed asset listings and IP assignments
- Noncompete and nonsolicitation agreements
- Guidelines for website, domains, and social accounts
- Bill of sale and UCC filings
- Security agreement and any escrow terms
You’ll also address reps and warranties, indemnities, assignment of key contracts and leases, employee offers, customer communications, and the transition services you’ll provide post-close. If your current lawyer isn’t a contracts specialist, ask for a referral.
When everything is aligned, you’ll move to signatures, funds flow, and a formal handoff.
Tips and Best Practices For Selling Your Business
The five steps above are your roadmap. These best practices help you avoid common pitfalls and maximize value.
Follow them to keep momentum and negotiate from strength.
Boost Your Sales
Sales momentum is fuel for your valuation. Don’t take your foot off the gas while you’re selling.
Owners sometimes shift all attention to the deal and neglect the business. Keep marketing, fulfill on time, and protect margins. Strong, steady numbers are more persuasive than last-minute spikes.
Surround yourself with pros so you can stay focused on performance: let your broker manage buyer outreach, your accountant handle requests, and your attorney handle contracts.
Develop an Exit Strategy
The best exits are planned early. If you don’t have a written plan, create one now—even if you decide to wait to sell.
Reduce owner dependence by documenting SOPs, cross-training staff, and delegating key responsibilities. Tidy up contracts, renew expiring licenses, and resolve open legal or tax issues so buyers don’t inherit avoidable risk.
Life happens. Build contingency plans for events outside your control and review possible exit strategies in advance.
Ask yourself tough questions now: What if a big box competitor moves in? What if illness, burnout, or a partner dispute forces your hand? What if your heirs don’t want the company? Planning removes pressure when it’s time to act.
When the day comes, you’ll already have a list of steps—and a team—ready to execute.
Be Rational
Selling is emotional—especially if you built the business from scratch. Pride is deserved, but emotion can cloud judgment.
Define your “walk-away” terms in advance (minimum price, deal structure, transition support you’ll provide). Data beats stories in negotiations, so anchor your decisions to numbers and trends, not effort.
And if the best offer comes from a competitor, evaluate it purely on merits. Your goal is a clean, well-priced exit.
Get Paid Up Front
Favor cash at close. If part of the price is deferred (seller note or earnout), secure it with clear terms—collateral where appropriate, defined performance metrics, and remedies if payments are late.
Offers with long payment horizons can look larger but carry more risk. All-cash or high-cash offers at a slightly lower headline price are often better and simpler to enforce.
Also confirm working capital targets, inventory treatment, and any prorations at close so you’re not surprised on the settlement statement.
Conclusion
Ready to sell your business? Keep it simple: know your value, prepare clean financials, hire the right broker, qualify multiple buyers, and close with strong legal counsel.
Be realistic about price and timelines. If the valuation isn’t there yet, spend a few months improving margins, documenting operations, and reducing owner reliance—those changes can pay off at closing.
Use this guide as a checklist from first conversation to signed purchase agreement. With steady execution and the right team, you’ll maximize price, minimize headaches, and exit on your terms.