Selling Your Business: 15 Steps to a Successful Exit

The number of small businesses being purchased each year continues to climb — and so has the average purchase price. That’s good for business owners thinking about selling. What’s buried in these growing statistics is the percentage of businesses listed for sale each year that actually sell. It’s less than 30%. Not a very good success rate.

The experts cite all kinds of reasons why businesses don’t sell. The biggest reason is most businesses being sold are not *good* businesses. Those that are good businesses are typically over-priced – and not by a little, but by a lot. To understand what separates good business opportunities from bad ones, see my article: Why I Can’t (or won’t) Sell Your Business.

Assuming you have a pretty good business and you are realistic about your selling price, what’s the BIGGEST reason it might not sell?

Many sellers are not prepared to sell their businesses and don’t understand or don’t take the necessary steps to ensure a successful sale.

We can fix that here and NOW. Detailed below are the 15 Steps to a Successful Exit. Whether you want to sell your own business, or retain a business broker, follow these steps to ensure a successful exit:

Step 1. Seller Preparation. Anticipate what a qualified buyer will want to see and will need to VERIFY, in order to make you an informed offer. This step involves getting your financials and business records in order. There may also be small improvements that can be made which could boost your valuation. A little preparation goes a long way towards ensuring a faster sale at the price you want. Assemble all the necessary information which will be required by buyers.

Example: For a free assessment on whether your business is sellable and what you can do to maximize the price, visit

Step 2. Business Valuation. Price your business to sell. This step involves knowing how most buyers will value your business within 20%. It includes preparing a ‘Owners Estimate of Value’ and a ‘Seller Discretionary Earnings (SDE)’ Worksheet, which shows prospective buyers how you arrived at your selling price. The SDE Worksheet also shows prospective buyers how much you really net, since your business is likely paying for certain expenses that a new owner would not incur.

Example: For a free Owner’s Estimate of Value Worksheet and a Seller Discretionary Earnings Worksheet, send me a request by email.

Step 3. Blind Teaser. Write a compelling teaser that prompts serious and qualified buyers to request more information on your business opportunity. This step involves creating interest among prospective buyers without disclosing the name or location of your business. A blind teaser will be needed to list your business on the Business Listing Services. It’s also used as a tool when reaching out to qualified buyers. It’s called a “blind teaser” because it provides buyers with a high-level overview of the opportunity without divulging any specific or confidential details.

Example: For a free sample of a winning Blind Teaser, send me a request by email.

Step 4. Selling Memorandum. Write an informative and accurate Selling Memorandum that provides the essential details on your business. This step involves providing prospective buyers with all the relevant facts and figures on your business. It’s your primary selling document and is used by buyers to initially assess your business, determine if it is a match with their criteria and objectives, and make you an offer.

Example: For an outline of a winning Selling Memorandum, send me a request by email.

Step 5. Disclosure Documents. Draft the disclosure documents required to sell your business and begin engaging with buyers. This step involves preparing a Non-Disclosure Agreement (NDA), Shareholder Consent to Sell, Seller Disclosure Statement, and Letter of Destruction. These are expected, perfunctory documents needed in the selling process.

Example: For free samples, send me a request by email.

Step 6. Business Listing Services (BLS). Advertise your business for sale by owner. This step involves knowing the appropriate places to list your business for sale and the best practices for generating leads through the various Business Listing Services. There are several good sites and a bunch of worthless sites. It’s important to know the difference so you don’t waste time and money. Creating a GREAT listing profile is an art and a science. With more than 50,000 listings on the BLS at any one time, you’ll need to know how to break through the clutter and grab the attention of prospective buyers.

Example: For a free sample of a winning Listing Profile, send me a request by email.

Step 7. Buyer Prospecting. Identify and contact individuals and businesses that might be interested in buying your business. This step involves identifying, researching, qualifying, and initiating contact with prospective buyers. Listing your business on the BLS and waiting for buyers to contact you is but one strategy. The best strategy is identifying, qualifying and assembling a list of the most likely buyers of your business. You will need a proactive outreach campaign to attract high quality suitors.

Example: For a free breakdown of the different types of buyers and their motivations to acquire a business, send me a request by email.

Step 8. Buyer Qualification. Determine whether a prospective buyer has the willingness and ability to acquire your business before releasing the name and location of your business, and before disclosing any confidential details. This step involves avoiding the tire kickers, lookie-loos, and people simply trying to collect competitive intelligence on you and your business. Disqualifying buyers is as important as qualifying buyers, so you can devote the time and effort on the serious ones.

Example: For free tips on how to quickly qualify buyers, give me a call.

Step 9. Buyer Brokers and Intermediaries. Be prepared to receive inquiries from buyer brokers and intermediaries. This step involves knowing how to deal with inquiries from buyer brokers and intermediaries. You need to be prepared to effectively deal with the professionals that the buyer has retained to help them acquire a business. They can make or break your deal.

Example: For free tips on how to handle inquiries from buyer brokers and intermediaries, give me a call.

Step 10. Seller Qualification and Initial Inspection. Be prepared to answer the buyer’s questions and to host  an onsite inspection of your business. This step involves how to engage with interested buyers when they conduct inspections of your business and records. What to tell them, or show them, and what not to tell them or show them. Knowing how to conduct yourself on phone calls and in meetings with interested buyers is part art and part science. You can also expect a number of phone calls and meeting with different partners and representatives of the buyers. These interactions can make or break a deal.

Example: For a free Buyer Inspection Checklist and management call FAQ, send me a request by email.

Step 11: Entertaining and Countering Offers. Negotiate the highest and best offer for your business. This step involves entertaining offers, negotiating and countering offers. You should bone up on the common terms you can expect to see in an offer. The offer may take several different forms depending upon the size and nature of your business, including Indication of Interest (IOI), Letter of Intent (LOI), and Term Sheet.

Example: For free tips on weighing offers and countering offers, give me a call.

Step 12: Due Diligence. Prepare for and manage the Due Diligence process to ensure a timely and successful closing. Assuming the offer is good, this is the crucial step that will determine if the deal will close. This step involves navigating the due diligence traps and keeping the deal on the rails, while also keeping other interested buyers warm in case the deal falls apart.

Example: For a free Due Diligence Checklist, send me a request by email.

Step 13: Purchase and Sale Agreement. Prepare to negotiate the Purchase and Sale Agreement. This step involves knowing the terms and conditions in a good purchase and sale agreement. Also, knowing the difference between an asset sale agreement and a stock purchase agreement, depending upon the nature of your business and how the deal will likely be structured by a buyer. It’s advisable to have good legal counsel for this step.

Example: For a free list of common terms in a Purchase and Sale Agreement and how to negotiate them, give me a call.

Step 14: Transaction and Closing Management. Prepare to sign the final agreement and ancillary documents. This step involves knowing the best practices for managing the transaction and the closing process. It would be nice if the buyer would just give you a check and you give him or her the keys, but it doesn’t work that way! There are all kinds of issues to settle at closing, like lease assignment, inventory reconciliation, and accounts receivables. Lots of deals fall apart at closing because the seller is caught unawares.

Example: For a free Checklist of Possible Closing Documents and Actions, send me a request by email.

Step 15: Transition Management. Ensure a smooth transition to the buyer; collect the full value you bargained for. In most business sales, there is a transition period. You, as the owner, may have agreed to stay on for a while to help the new owner come up to speed. You may provide seller financing, which requires you to keep tabs on the business to ensure you get your payments. Your sale may also include an escrow “hold back” or “earn out” that pays you in the future based on certain agreed upon events or milestones. This step involves good transition management best practices.

Example: For a free Checklist of Items to Transfer Post-Closing, send me a request by email.


WHEW! Tired yet? All those steps. Now you know why and how Business Brokers earn their success fee! There is nothing preventing you from taking these steps yourself and pocketing the broker fee or outsourcing the steps you don’t have the time or expertise to undertake yourself.

For more information on these steps, and the most comprehensive guide ever written on how to sell a small business yourself, check out our DIY Guide.

May you have an awesome exit and enjoy the fruits of your labor! Contact me with questions or for examples.

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