Selling a business is more than a transaction—it’s a transition. You’re not just handing over assets; you’re stepping away from something you built, managed, and probably poured years of your life into. Whether you’re ready to retire, pivot into a new venture, or simply move on, understanding the sale process is key to doing it right.
Here’s a step-by-step breakdown of what it takes to go from business owner to successful seller, plus one financial detail that often surprises first-timers.
Preparing the Business for Sale
Before listing your business for sale, you need to get it in order—operationally, financially, and legally. A well-prepared business attracts more serious buyers and better offers.
Start by gathering and reviewing:
- Financial statements (preferably 3–5 years)
- Tax returns
- Customer and supplier contracts
- Lease agreements and real estate documents
- Inventory lists and equipment appraisals
Clean up loose ends. Pay off debts if possible, ensure your books are accurate, and tighten up processes so a buyer can step in with confidence.
Understanding Business Valuation
Setting a price isn’t about what you think the business is worth—it’s about what the market is willing to pay. That’s why most owners hire a professional to conduct a business valuation.
Common methods include:
- Asset-based valuation: Focuses on what the company owns
- Earnings multiplier: Uses profits to estimate future value
- Market comparison: Based on sales of similar businesses
The goal is to strike a balance between being competitive and maximizing your return. Be prepared to back up your asking price with solid financials and operational performance.
Choosing How to Sell
You can sell the business yourself, or you can work with a business broker. Going solo gives you more control and potentially saves money, but it also demands time, legal knowledge, and negotiation skills.
Most owners choose to hire a broker, especially if the sale is complex or if confidentiality is critical. Brokers help with:
- Marketing the business
- Screening potential buyers
- Negotiating the deal
- Managing paperwork and due diligence
They don’t work for free, though. A typical business broker fee ranges from 8–12% of the final sale price—something to factor into your bottom line.
Finding the Right Buyer
Not all buyers are created equal. Some are investors. Some are competitors. Some are looking to be hands-on operators. Knowing who you’re willing to sell to—and under what terms—makes a big difference.
Consider the following when evaluating potential buyers:
- Do they have the financial capacity?
- Will they keep staff and operations intact?
- Are they aligned with your vision or values?
- Can they pass background or financing checks?
Confidentiality is also key at this stage. You don’t want word of the sale leaking to employees, suppliers, or competitors too early. Serious buyers should sign a nondisclosure agreement (NDA) before receiving detailed information.
Navigating Due Diligence
Once you’ve accepted a buyer’s offer, due diligence begins. This is the phase where they verify everything you’ve claimed about the business. Expect a deep dive into your:
- Financial records
- Legal standing
- Contracts
- Customer base
- Vendor relationships
Stay organized and transparent to avoid delays or red flags. Having your accountant and legal advisor ready to respond helps keep things on track.
Finalizing the Deal
If due diligence checks out, the final step is signing the sales agreement. This contract outlines everything: the price, payment structure, asset transfers, non-compete clauses, and what happens after the sale.
You may be asked to stay on for a transition period to help train the new owner or introduce them to key clients. These agreements are common and can smooth the handoff process.
After everything is signed and payment is received, the business is officially sold—and you’re no longer the owner.
According to BizBuySell’s 2023 Insight Report, the median sale price for small businesses increased to $350,000, a sign that demand for healthy businesses is on the rise. Source
Conclusion
Selling a business is never a one-size-fits-all process, but understanding the key stages—from preparation to closing—can make the journey far less stressful. With smart planning, good advice, and a realistic outlook, you can sell on your own terms and open the door to your next chapter with confidence.
