Selling a small business usually takes several months to a year, and the work starts well before a buyer shows up. Owners who know the steps ahead of time tend to get a better price and a smoother close.
1. Decide why and when you're selling
Retirement, burnout, health, a new opportunity, a partner dispute: your reason shapes your timeline and the deal you'll accept. Buyers will ask, so have a clear, honest answer. If you can, give yourself a year or two of runway. Sellers in a hurry usually take less.
2. Get a realistic valuation
Most small businesses are priced as a multiple of seller's discretionary earnings (SDE). The multiple depends on risk: how much the business relies on you, how concentrated your customers are, and how clean your records look. A professional valuation gives you a range grounded in what buyers actually pay, not what you hope to get.
3. Fix what lowers the price
Before listing, deal with the issues buyers will find anyway. Common ones:
- Books that mix personal and business expenses
- Too much depending on the owner
- One or two customers carrying the business
- A lease that can't transfer, or no lease at all
- Processes that live only in your head
4. Prepare the buyer package
Serious buyers expect a confidential information memorandum: an overview of the business, its history, customers, team, operations, and recast financials. A good package answers the first round of questions before they're asked.
5. Market it confidentially
Listings describe the business without naming it. Buyers who want details are screened and sign a nondisclosure agreement first. That keeps employees, customers, and competitors from hearing about the sale too early.
6. Screen buyers and negotiate offers
Not every interested buyer can close. Check financial capacity and experience before you spend time with them. When offers come in as letters of intent, look past the headline price: how much is cash at close, how much is seller financing or an earnout, and how long you're expected to stay on.
7. Get through due diligence
After you accept an offer, the buyer reviews everything. This is where many deals fall apart. Here's what to expect in due diligence and how to keep it moving.
8. Close and hand off
Attorneys draft the purchase agreement, the buyer's lender funds, and ownership transfers. Most sellers then help with a transition period, introducing the new owner to customers, staff, and vendors.
Want to know where your business stands? Take the free readiness assessment or request a free valuation.
This article is general information, not legal, tax, or financial advice.