What are The Steps to Selling a Business?

What are The Steps to Selling a Business

In this review, we provide a detailed overview of the sales process for business owners who are planning their exit strategy. This 13-step guide helps you learn more so that you can adequately prepare and feel confident as you head into your sales journey. Of course, the steps of selling your business should be personalized, most sales processes involve the steps discussed below. 

Receive a Professional Business ValuationAdobeStock 366108004

The first step of selling a business is the professional valuation. Specifically, business owners who are planning their exit strategy should use the market approach to determine the worth of their company during a sale. You can receive a professional valuation from a business broker. Be sure to choose one who is experienced and able to properly assess the entire worth of your company by considering non-financial elements as well as assessing your financial information. 

Assemble Your Sales Team

Selling a business without professional assistance is a major challenge and often leads to a range of complications, such as confidential information reaching competitors and the public, a lack of fair offers, setbacks in the sales process and a final sale price well below fair market value. You can best prevent this by assembling a team of professionals. Namely, this begins with choosing a business broker. You may also benefit from a mergers and acquisitions attorney and certified public accountant (CPA) as well.

Establish Your Exit Strategy and Sale Goals

You may already have a general idea of your exit strategy goals. However, during this step, we dive deeper into the specifics of what the ideal end result of the sale looks like for you (and your company). For example, this may include finding a buyer who does not need much assistance with transition and keeps your existing staff. Personally, your goals may include spending more time with family, starting a new business venture with one of your business partners, etc. In other words, this step is a chance to answer the question of “why” you are selling. This helps you stay focused throughout the sales journey and helps you better deal with the emotions of selling a business.

Enhance Your Company’s Value Prior to The Sale (if Necessary)

This may not be necessary if you are happy with the current value of your company and there is not much room for an increased value through extra effort. In some cases, it may be best to go to market right away, depending on the specifics of your company and industry. However, in some cases, business owners decide to wait for more favorable market conditions and work to improve their company’s value in the meantime. 

Gather Your Financial and Legal Documents

You should then collect your company’s financial, legal, and operational documents. This helps you save time during negotiations, due diligence, and closing. Your broker (along with your attorney and CPA, if applicable) can provide you with a list of documents you will need to gather with insights into where you can find each document. 

Create Your Confidential Information Memorandum (CIM) and Video Interview

This is the last step you will take before you officially seek a buyer. A confidential information memorandum, also called a CIM or sales memorandum, is a document that displays your company’s information. This is paired with a video interview that further explains your company and provides a tour of your facilities. Your broker will then send this to potential buyers (via various confidential channels). Potential buyers who are interested in learning more and making an offer sign a nondisclosure agreement (NDA) before they view the CIM and video interview. 

Target Potential Buyers and Screen Offers as They Arrive

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Your business broker also screens offers as they arrive. This ensures anyone who makes an offer is serious about purchasing your company and has the means to do so. By eliminating non-qualified prospects, you can help ensure you allow proper time for those who are qualified. 

Negotiate The Best Deal With a Qualified Buyer

This can be a stressful step for many business owners. This is why it is imperative to work with a business broker who has excellent negotiation skills and understands how to work on your behalf to secure the best deal possible while still maintaining professionalism. Of course, negotiations usually involve far more than a discussion of the sale price. It may also include details related to the owner’s involvement during the transition, financing, non-financial considerations such as keeping employees on staff, and more. Contingencies are also negotiated during this stage as well. 

Secure a Purchase Deal With a Signed Letter of Intent (LOI)

The ultimate goal is to secure a deal with a qualified buyer. The deal is locked-in when they sign a letter of intent (LOI). The LOI lays out the details of the purchase agreement, including the purchase price, what is included in the sale, the payment method, and more. 

Follow Your Due Diligence Map

Due diligence is the period in your sales journey where the buyer has the opportunity to review your financial records, visit your facilities (and oversee your work processes), and provide a list of questions that they would like for you to answer; other tasks may be included as well. As you might imagine, without a clearly defined process and timeline, this can drag on for a while. It helps to have a due diligence map. This is a pre-established process that lays out the steps of due diligence and provides a deadline for each step. This provides structure and helps both sides move to close the sale sooner. 

Close The Sale With a Signed Purchase Agreement

After due diligence, you will close the sale with a signed purchase agreement. More specifically, during closing, you and your attorney (along with the buyer and their attorney) will review the purchase agreement a final time, clarify details, and eventually sign the agreement. The buyer then transfers the funds (or starts the payment if they are financing) at the closing table. 

Transfer Ownership of The Company to The Buyer

Some sellers are not involved at all with the transition after closing. However, in most cases, there is a lot of work to do. From transferring the business information, utilities, etc. into the new owner’s name to introducing them to employees and existing customers, these details must be completed according to the purchase agreement. 

Start Your Next Journey in Life

After a successful transition, you are free to fully divulge into the next journey of your life. From retirement to new business ventures, this is your time to enjoy the proceeds of the sale and have a blast with the next stage in your life. 

Start The Sales Process With a Free Business Valuation

Are you ready to sell your company? If so, let’s get started. Here at Sigma Mergers and Acquisitions, we offer free, no-obligation business valuations (and consultations). Contact us today for your free, make-based business valuation. 

Scot Cockroft Business Broker
Hi, I’m Scot Cockroft.

When I founded Sigma Mergers and Acquisitions back in 2003, I had sold my business the year prior.

Now, that can sound good, but let me tell you, back in 2003, it was not easy to sell a business. Not that I’m saying in modern day times it’s easy to sell a business, but back then I interviewed broker after broker after broker, and no one was interested in actually seeing the value that my business brought to the table.


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Sigma is a the leading business broker in with Corporate offices in Dallas/Fort Worth with roots from 1984. Over 600 businesses sold in Dallas, Fort Worth, Texas, Oklahoma and across the South. Sigma provides full business brokerage services with NO upfront fees. We provide Market approach business valuations for business sales. Sigma is passionate about helping business owners achieve their goal of financial security. Contact us today for a free no obligation business valuation. We are here to help you achieve your goals.

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