How to Sell My Business, Step by Step | Selling My Business Guide

At a Glance

Most small business sales take six to twelve months, and preparation is the part owners most often underestimate.

Buyers price a business on a multiple of its earnings, so clean, provable financials move the price more than negotiation does.

Who you sell to (a family member, a competitor, an individual or private equity) shapes the price, the deal terms and what happens to your team.

Due diligence is where most deals stall. Organizing your records before you go to market is the cheapest way to protect the deal.

1. Decide why and when you want to sell

Your reason shapes everything else. Retirement, burnout, health and a buyer’s unsolicited offer each lead to different timelines and different buyers. If you can wait, a year of preparation usually raises the price more than any negotiating tactic.

2. Get your financials in order

Buyers price your business off its earnings, so they need to trust the numbers. Have at least three years of clean profit-and-loss statements, balance sheets and tax returns. Separate personal expenses from business expenses. A buyer will add them back, but only if you can show them.

3. Learn what your business is worth

Small businesses are usually priced as a multiple of earnings. Smaller businesses use seller’s discretionary earnings (SDE), which is profit plus the owner’s salary and perks. Larger ones use EBITDA. The multiple depends on your industry, size, growth and how much the business depends on you.

Business size	Usual earnings measure	Typical buyer
Under about $1M in earnings	SDE	Individual buyers, owner-operators
About $1M–$5M	EBITDA	Search funds, strategic buyers, small private equity
Over about $5M	EBITDA	Private equity, larger strategic buyers

4. Decide who you want to sell to

The main options are a family member or employee, a competitor or other strategic buyer, an individual buyer, or a private equity firm. Each pays differently and treats your team differently.

5. Choose your advisors

At minimum you need a lawyer and a CPA who handle business sales. A broker or M&A advisor is optional. They help most when you need a wide search for buyers.

6. Market the business confidentially

Buyers first see an anonymous summary (a “teaser”). Serious buyers sign a non-disclosure agreement before they receive your full details.

7. Negotiate a letter of intent

The letter of intent (LOI) sets the price, the structure (cash at close, seller financing, earnout), and the timeline. Most of it isn’t binding, but it sets the frame for everything that follows.

8. Get through due diligence

The buyer checks your finances, contracts, employees and legal exposure. This is where most deals slow down or fall apart, and it’s why step 2 matters.

9. Close and hand over

You sign the purchase agreement, funds transfer, and you usually stay on for a transition period to introduce the buyer to customers and staff.

Owners Also Ask

How long does it take to sell a small business?

Most sales take six to twelve months from preparation to closing. Preparation alone can take a few months if your books need cleaning up.

Can I sell my business without a broker?

Yes. Owners often sell directly to an employee, a competitor or a buyer who approaches them. You still need a lawyer and an accountant who handle business sales.

Should I tell my employees I'm selling?

Usually not until a deal is close. Early news can unsettle staff and customers. Buyers sign a confidentiality agreement before they see details.