Selling a business is a major financial decision — and when handled properly, it can be both profitable and stress-free. Whether you’re selling a small retail shop or a large corporation, understanding the business selling process helps you avoid mistakes and move efficiently from listing to closing.
This detailed guide walks you through every step, from determining your business’s value to finalizing the deal. It’s based on best practices commonly used by professional brokers, attorneys, and sellers.
Note: The information below provides general guidance for sellers and is not guaranteed or endorsed for accuracy by BusiMarket.com. Always consult with qualified professionals for legal and financial advice.
1. Determine the Fair Market Value of the Business
The first step is identifying what your business is truly worth. The fair market value depends on several factors — including the business type, size, profitability, age, and location.
To get an accurate valuation, consult with a business broker, accountant, or loan officer who can assess your assets, liabilities, and earning potential. Once you know your asking price, you can move forward with confidence to the next steps.
2. Prepare All Books and Financial Records
Transparency builds trust. Before listing your business for sale, organize all financial documents and operational records for potential buyers. This should include:
- The last three years of business income tax returns
- Current Profit & Loss statements and Balance Sheets
- A copy of the original lease and sublease agreements
- A current equipment list and inventory breakdown
Having accurate, up-to-date documents ready will make your business more attractive to buyers and speed up the due diligence process.
3. Put Your Business on the Market
Once your documents are prepared, it’s time to find buyers. You can market your business using one or more of the following methods:
- List your business on a Business Multiple Listing Service (MLS) such as BusiMarket.com – Business For Sale
- Advertise in local newspapers or online business directories
- Hire a real estate or business broker who specializes in business sales
Each option has its pros and cons depending on your budget, confidentiality needs, and desired exposure.
4. Deal with Potential Buyers
When buyers start showing interest, evaluate them carefully. Ask yourself:
- Is the buyer financially qualified?
- Do they have experience managing or owning a similar business?
- Are they genuinely committed to purchasing, or just exploring options?
Screening buyers early saves time and helps ensure serious negotiations later.
5. Receiving an Offer
When a buyer decides to move forward, they’ll present a written offer. If a broker or real estate agent is involved, they’ll deliver the offer to you and explain the terms. Review all offers carefully and be prepared to counter or negotiate.
6. Negotiation: Price, Terms, and Conditions
This stage determines the final details of the sale. You and the buyer will negotiate the purchase price, payment structure, financing, included assets, and any special conditions. Always involve a legal advisor to ensure all terms are clear and binding.
7. Accepting an Offer
Once both parties agree, the Purchase and Sale Agreement is signed and dated by both the buyer and seller. Be sure every page is initialed to confirm mutual acceptance of all terms.
8. Provide Books and Records to the Buyer
After the agreement is signed, provide all necessary documents — typically within one to two business days. This allows the buyer to complete final due diligence before closing.
9. Work with the Buyer to Remove Contingencies
Contingencies are conditions that must be met before closing, such as financing approval or inspection results. Cooperate with the buyer to resolve these items promptly to avoid delays.
10. Signing the Closing Statement (1–3 Days Before Closing)
Once all contingencies are cleared, both parties meet with the Closing or Escrow Agent to sign the final documents.
The buyer should contact the escrow agent to determine the remaining payment amount (typically via cashier’s check or money order). On signing day:
- The buyer pays the remaining balance.
- The escrow agent collects the funds from the buyer and their bank.
- The seller receives the total payment (down payment + loan funds – closing costs).
11. The Night Before the Closing Date
The buyer and seller meet at the business site after hours to complete a few final tasks:
- Review and confirm the equipment list
- Finalize inventory and supply payments — list each item with its wholesale value, sign the total, and complete payment
- The seller hands over the business keys to the buyer
12. The Closing Date
Congratulations — you’ve officially sold your business!
The buyer takes full ownership, and the sale is recorded. Take time to celebrate your accomplishment and prepare for your next venture, whether it’s retirement, a new project, or another business opportunity.