The Complete Guide to Selling Your Business
Selling your business can be a deeply personal experience that can feel just as stressful as starting it up years ago. The emotional weight of letting go, along with the pressure to secure a fair price, can keep any business owner awake at night.
However, there is a way to go through the process with confidence and clarity. Here is a step-by-step guide to help you make the right decisions.
Consider the Best Timing
There’s no “perfect” moment to sell your business, but you need to first consider your business’s momentum, your personal goals, and external conditions to avoid the wrong timing. Getting it right means you can position yourself for a smoother transition and stronger returns.
Here are some key signs you should look out for:
You’ve had consistent profitability and revenue growth over multiple quarters
You’re emotionally ready to step away — and you have clear post-sale plans
You’ve had a recent product launch or market expansion
The economy is strong and interest rates are low
While all of these factors can play a huge role, the best time to sell is when you are prepared for the transition.
Organize Your Financial Records
Prior to selling your business, you need to be aware that buyers will examine every small detail with a fine-tooth comb. That’s why having clean and organized documentation should top your priority list.
Some of the financial records that can come in handy include profit and loss statements, balance sheets, cash flow reports, and tax records.
If possible, find a way to highlight metrics that tell your business’s true story. Be careful while showcasing the positives — always provide accurate and honest details before you sell your business.
This is because while buyers don’t expect perfection, they do expect honesty. If you have gaps or challenges in your financial records, address them upfront.
Decide Whether to Hire a Broker
Many business owners prefer selling their businesses on their own to save money, especially if the buyer is someone they already know and trust.
However, business brokers can bring experience and efficiency that may outweigh the upfront expense. They can handle the legwork — everything from promoting your company to negotiations with buyers — while you carry on with the business.
Look for the Right Buyer
Initial interest is often the first step to a sale, but finding the right buyer who can follow through and sustain what you’ve built means looking beyond that first spark.
You need to:
Confirm the buyer’s funding sources
Look into their track record and see how they have managed similar ventures
Research their professional history
Consider how their priorities reflect your own
Examining these factors allows you to narrow the pool to candidates who are prepared to honor your business’s legacy while securing its future.
Seal the Deal Right the First Time With These Key Steps
Letting go of something you’ve built over the years can stir unexpected emotions, from uncertainty about the future to pressure to secure fair terms. Following these steps can help ease some of these concerns so that you can close the deal the right way.
How Does a Business Broker Get a Better Price for My Business?
If you’re selling your business (or even just considering it), you might have heard people tell you to work with a business broker. You also might understandably hesitate — why hire someone and pay a commission when you could just sell your business yourself?
You may not realize that a good business broker can often get you a better price for your business. Even when you factor in the broker’s commission, you still end up with a larger profit than you would if you sold your business yourself.
How can a business broker convince a buyer to pay so much more? Here’s a closer look.
They Can Accurately Value Your Business
A business valuation calculator can give you a quick idea of what your business may be worth. However, when it comes to selling, you want your valuation to be as detailed and accurate as possible.
If you set the price too low, you could miss out on thousands. But if you set it too high, you’ll waste time marketing it before you realize you’ll need to drop the price.
Business brokers are experts at valuing businesses. They’re also attuned to market trends and know what features of a business may make it worth paying a premium for.
They Have Access to a Pool of Buyers
Business brokers will usually maintain a list of people who are actively looking to purchase businesses. More potential buyers generate more competition, and that puts you in a place to possibly receive offers above the asking price.
They’re Expert Negotiators
In virtually every case, selling a business involves negotiating the price, the terms and conditions of the sale, or both. If you aren’t experienced when it comes to negotiating the sale of a business, you might find this step hard to navigate. There’s also a very real possibility that you’ll lose money by agreeing to unreasonable terms.
When you work with a business broker, you’ll have an advocate during this critical process. Your business broker can handle negotiations for you while representing your best interests.
They Keep Everything Confidential
If you sell your business on your own, it’s nearly impossible to avoid the word getting out. If this happens, your employees may quit because they’re worried their jobs are in jeopardy. Your existing client base may be tempted to go elsewhere, and some of your trade secrets may be revealed.
Business brokers are experts at maintaining confidentiality throughout the sales process. When you work with one, you can avoid arousing suspicion — and all the complications that come with it.
Should You Hire a Business Broker?
Choosing whether you should work with a business broker is just one of the many decisions you’ll make as a part of selling your business. It’s not a decision you should make lightly — it’s a choice that can dramatically affect your business’s final sale price.
Ultimately, unless you already have extensive experience selling businesses, working with a broker makes the process easier and is also likely to get you the greatest profit.