{"id":1218,"date":"2025-04-23T11:00:00","date_gmt":"2025-04-23T11:00:00","guid":{"rendered":"http:\/\/www.pascaller.com\/?p=1218"},"modified":"2025-04-30T10:54:29","modified_gmt":"2025-04-30T10:54:29","slug":"how-to-sell-your-business-and-make-a-successful-exit","status":"publish","type":"post","link":"http:\/\/www.pascaller.com\/index.php\/2025\/04\/23\/how-to-sell-your-business-and-make-a-successful-exit\/","title":{"rendered":"How To Sell Your Business and Make a Successful Exit"},"content":{"rendered":"
<\/p>\n
You\u2019ve done it: You took an idea, built it into a thriving business, and now you\u2019re ready to sell. Congratulations \u2014 few entrepreneurs make it to this point. You\u2019re in the right place if you find yourself asking, \u201cHow do I sell my business?\u201d<\/p>\n
Now, it\u2019s time to ensure you make the right deal for your most prized possession. Regardless of why you\u2019re moving on, there are actionable steps you can take so that your business is sold at the right time, for the right price, and to the right buyer.<\/p>\n
Table of Contents<\/strong><\/p>\n <\/a> <\/p>\n M&A is everywhere right now, according to Monique Swansen, Founder and CEO of Automated Accounting Services<\/a>, a firm committed to supporting small and growing businesses. \u201cEvery group I\u2019ve seen putting together conferences is talking about mergers and acquisitions as a tool for making an exit plan or growing your business,\u201d she says.<\/p>\n Entrepreneurs choose to sell their businesses for many reasons, ranging from retirement and health problems to co-founder conflict and just plain boredom. In 2024, 9,456<\/a> small businesses were sold, a 5% jump from the year before.<\/p>\n With that in mind, here are the basic steps we recommend following<\/p>\n Spend some time researching how to sell (you\u2019re doing that now!), and figure out if you need to make any changes to get your business ready for the process. Common actions include adding business processes to make the business scalable, adding features that would open up a new market, or filing patents to lock down intellectual property.<\/p>\n Do your due diligence by gathering all of your documentation and getting ahead of anything that could slow down the sale (such as signoff from other shareholders or active lawsuits or legal proceedings). In addition to preventing delays, this step makes your business far more attractive to potential buyers. Here\u2019s a breakdown of what you\u2019ll need across the three main categories:<\/p>\n It\u2019s a good idea to create a financial packet with copies of important documents that can be shared with serious buyers during due diligence:<\/p>\n It makes sense that your buyers will want to ensure the business is legally sound, so preparing legal documentation in advance can prevent last-minute delays:<\/p>\n Turn to experts (e.g., business brokers, merger and acquisition advisers) to understand how much your company is worth, then consider if you\u2019re willing to accept that price.<\/p>\n Find the why <\/em>when thinking of your ideal fit. For example: Does the buyer have the cash to buy, or do they need financing? Have they bought companies before? Who would need to approve the deal on the buyer\u2019s end (internally: founders, board members, management; externally: investors, banks)? Will they keep your team employed after the sale?<\/p>\n Putting together a team early can prevent a lot of stumbling down the road. Professionals who could help with the process include:<\/p>\n For small businesses, owners can list their companies anonymously on business broker sites. For larger ventures, owners should identify potential suitors by looking at direct rivals and companies in related industries.<\/p>\n Deals can fall through days before closing; stay on top of it along the way by responding to requests within 24 hours, scheduling weekly calls with advisers, and pushing legal counsel to move documents forward quickly.<\/p>\n Pro tip: <\/strong>Time is your enemy. Resist any efforts made to push the closing date.<\/p>\n Your business is your baby: You should be hands-on when planning your company\u2019s transition (this includes how the new owner will interact with your employees and customers). But entrepreneurs also need to give thought to life after their exit, from retirement planning and managing sale proceeds to future personal and professional goals.<\/p>\n <\/a> <\/p>\n Age is one of the reasons that Swansen is seeing such an uptick in small business owners getting ready to sell. \u201cLots of founders are getting closer to retirement age and are ready to pass the torch.\u201d<\/p>\n She goes on to say that she also talks with lots of other business owners who started a company with the idea of selling, and now that things are flush, they\u2019re ready to \u201cmake a profitable exit.<\/p>\n Knowing exactly when to let go of your venture can be intimidating, but one thing that most experts seem to agree on is that it\u2019s best to decide early on if selling is in your future.<\/p>\n \u201cThe best time for entrepreneurs to consider selling their business is when they start their company,\u201d says business broker Katie Milton Jordan<\/a>. \u201cConsider what you want your company to do for you. Are you creating a company that you want to sell or a company that will create an independent stream of income just for you?\u201d<\/p>\n For those who start a business as a side hustle, that\u2019s not always at the forefront, but choosing to sell your business isn\u2019t something most companies can do on a whim.<\/p>\n When weighing the pros and cons of an exit, also think about the financial health of your company. \u201cYou want to be selling when your company is performing well, you\u2019re cashed up, and you\u2019re growing,\u201d says David Raffa<\/a>, a corporate finance expert. \u201cThe worst possible thing you can have is to sell in the slope part of your year.\u201d<\/p>\n For Cindy Summers, founder of Sugar Fix\u00e9 P\u00e2tisserie, moving on felt right once her business no longer challenged her or fit her lifestyle.<\/p>\n \u201cMy passion is building businesses and creating great customer experiences. Once my business was established, I became more of an operator. This didn\u2019t give me the mental gymnastics I needed to stay inspired,\u201d she says.<\/p>\n Additionally, the nature of her business made it difficult for Summers to find work-life balance. \u201cI was married but kid-free when I started the business. Three kids later and there was an emotional conflict between my family, employees, and customers. Busiest times in a bakery are weekends and holidays. This meant missing out on a lot at home,\u201d she says.<\/p>\n Some other common life experiences that lead to exits include:<\/p>\n Jordan advises owners to sell their companies before the \u201cfive D\u2019s\u201d: death, divorce, disease, disengagement, and downturn. Making an exit prior to those events can ensure you get a fair price for your creation.<\/p>\n \u201cMost entrepreneurs tend to get out too late when they have no gas left in the tank, and the growth rate of the business is a big piece of the value you get in the end,\u201d says Raleigh Williams, who sold his escape-room business for $26M. \u201cEnding on a high note is something that pro exit entrepreneurs do versus amateurs.\u201d<\/p>\n Swansen emphasizes the need to get your ducks in a row before you get anywhere close to the starting line of selling your business<\/a>. As an accounting expert, she primarily focuses on the financial and operational aspects of preparing for a sale.<\/p>\n \u201cIf your business is well-organized, profitable, and growing at scale, with all of your financials ready to go, you\u2019re probably going to get a higher purchase price,\u201d she says.<\/p>\n So what does that look like?<\/p>\n Several years before you\u2019re ready to exit, it\u2019s a good idea to implement processes and get the right team members in the right places so you can create a turnkey operation.<\/p>\n That means using an integrated suite of tools to automate as much as possible \u2014 for example, HubSpot\u2019s CRM<\/a> and Marketing Hub<\/a> are designed to work well together, which streamlines operations and makes it easier to create a positive customer experience.<\/p>\n As you get closer to going to market, it\u2019s also important to get your financials in a row to paint the best possible picture for your potential buyers.<\/p>\n <\/a> <\/p>\n Della Kirkman<\/a>, a CPA and business investor, uses a simple calculation to get entrepreneurs started: \u201cA quick and easy formula is to determine the five-year weighted average of EBITDA and multiply it by the range of multiples that are appropriate for your type of business.\u201d Kirkman says she most often uses a multiple between three and five.<\/p>\n Meeting with experts to get a professional valuation of your business is the most accurate way to find the right number. Therefore, get started with assembling a team of advisers early in the selling process, and find professionals who work closely with your industry whenever possible. The more niche their experience, the more they\u2019ll be able to guide your sale appropriately.<\/p>\n Third-party experts can also ensure the business is ready to be sold. \u201cA lot of business owners don\u2019t realize their company can\u2019t be transacted and isn\u2019t packaged properly to go to market,\u201d Jordan says. \u201cThat\u2019s why it\u2019s important to ask questions and get educated as soon as possible.\u201d<\/p>\n A common roadblock Jordan sees is solopreneur businesses. For those who wear every hat at their firm, buyers feel they are essentially buying a job rather than a company. Another reason for a difficult transaction could be if a business is tied up in any sort of legal proceedings.<\/p>\n Jordan suggests depersonalizing your operations to make a business more appealing to buyers.<\/p>\n \u201cBusiness owners create a business and a system in a way that\u2019s easy for them<\/em> to run, built around their strengths and personality, because they work so hard around the clock,\u201d says Jordan. \u201cWhen it comes time to sell, their quirks are not the quirks of the new owner.\u201d<\/p>\n She suggests that owners create manuals, standard operating procedures (SOPs), and automations where possible.<\/p>\n \u201cJust like when someone buys a new car, and you hand them the set of keys and the owner\u2019s manual,\u201d she says. \u201cIf you have a company you can hand off with an owner\u2019s manual, you have something that can be transacted.\u201d<\/p>\n Once you have the right deal, stay active in the process until the very end.<\/p>\n \u201cAs a founder, so much of your net worth is tied up in this transaction,\u201d Williams says. \u201cOutsourcing that process and not being involved, or expecting a lawyer or broker to be as involved in the details to the same extent you need to be, is unwise.\u201d<\/p>\n <\/a> <\/p>\n As you can see, there are lots<\/em> of considerations to make when selling your business. And because there are so many factors \u2014 including your industry, business size, and personal goals, among others \u2014 there\u2019s no single best way to sell your company.<\/p>\n You\u2019ll want to think about whether you want<\/p>\n Depending on the complexity of your business and your level of M&A experience, it may feel like an obvious choice to go with a broker. There\u2019s a reason that\u2019s one of the most popular routes. However, many businesses choose to sell directly or go to auction as well. Each of the three comes with benefits and drawbacks, so I\u2019m going to break them down below:<\/p>\n A business broker or M&A adviser acts as an intermediary, connecting you with potential buyers and guiding negotiations. Brokers can help increase your sale price, handle complex paperwork, and streamline the process \u2014 but they come at a cost.<\/p>\n Pros:<\/strong><\/p>\n Cons:<\/strong><\/p>\n Where to Start:<\/strong><\/p>\n Selling directly to a buyer gives you full control over the process. This is true regardless of who your buyer is<\/em>, whether it\u2019s a competitor, investor, employee, or even a family member. Experienced entrepreneurs who already have interested buyers and those who prefer to avoid brokerage fees often choose this option. However, there are trade-offs here as well.<\/p>\n Pros:<\/strong><\/p>\n Cons:<\/strong><\/p>\n Where to Start:<\/strong><\/p>\n If your business is in high demand or you need a quick sale, an auction process can be appealing. You might get multiple competing offers in a short period of time. However, keep in mind that auctions work best for businesses with strong financials, unique assets, or niche market positioning (though going too niche can also be problematic).<\/p>\n Pros:<\/strong><\/p>\n Cons:<\/strong><\/p>\n Where to Start:<\/strong><\/p>\n <\/a> <\/p>\n If you\u2019re wondering where to sell your business<\/a>, the right place depends on its size. For small solopreneur-owned ventures, owners can list their companies anonymously on business broker sites such as BizBuySell<\/a>).<\/p>\n There are many different business sites. Some target specific cities or states, as buyers often want to acquire local businesses. Experts recommend researching the best site to list using a simple Google search that includes your location.<\/p>\n For larger companies, Raffa says that entrepreneurs can spearhead the selling process directly through a sell-side banker rather than list on a business broker website.<\/p>\n \u201cIn that situation, you should do rounds of approaches,\u201d he explains. \u201cMake a list of 100 potential buyers, and start with the first 10-30 ideal ones, and work down that list.\u201d<\/p>\n Raffa advises assembling your list by including companies 5-10x your size in your business space (often competitors), companies in a closely related space, companies in a similar industry who are struggling and need a new edge, and companies that want to enter your geographic market.<\/p>\n He notes that when reaching out to potential buyers, likely only half will engage with you, and they should sign NDAs before you disclose further financial information and insider business details.<\/p>\n Alternatively, you can start with companies lower down the list to dip your toe in, understand the typical questions asked, and circle back to your ideal buyers when you feel more prepared.<\/p>\n When Williams began the process of finding a buyer, he approached direct competitors first, a tactic he says is helpful across industries.<\/p>\n \u201cPeople in the same industry or adjacent to the industry are the easiest people to do deals with because they understand what they\u2019re looking at,\u201d he says.<\/p>\n It\u2019s also common for business owners to get inquiries from companies or investors interested in acquiring. Even if a sale isn\u2019t in your immediate plans, don\u2019t ignore the opportunities, which may lay the groundwork for a deal down the road.<\/p>\n\n
How to Sell a Business<\/strong><\/h2>\n
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1. Educate yourself.<\/h3>\n
Tips to Get Started:<\/h4>\n
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2. Get organized.<\/h3>\n
Financial Documents<\/h4>\n
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Legal Documents<\/h4>\n
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Operational Documents<\/h3>\n
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Tips to Get Started:<\/h4>\n
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3. Get a preliminary business valuation.<\/strong><\/h3>\n
Tips to Get Started:<\/h4>\n
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4. Create a potential buyer profile.<\/h3>\n
Tips to Get Started:<\/h4>\n
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5. Assemble your team.<\/h3>\n
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Tips to Get Started:<\/h4>\n
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6. Prepare to go to market.<\/h3>\n
Tips to Get Started:<\/h4>\n
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7. Stay involved in the process.<\/h3>\n
Tips to Get Started:<\/h4>\n
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8. Prepare for life after sale.<\/h3>\n
Tips to Get Started:<\/h4>\n
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When to Sell Your Business<\/strong><\/h2>\n
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How do you know the right<\/em> time to sell your business?<\/h3>\n
Selling your business is a deeply personal decision.<\/h3>\n
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Don\u2019t wait for the \u201cfive D\u2019s.\u201d<\/h3>\n
Organize and scale your business before you prepare to sell it.<\/h3>\n
How Much to Sell Your Business For<\/strong><\/h2>\n
Get a professional valuation.<\/h3>\n
Step out of solopreneur mode and put on a CEO hat.<\/h3>\n
Choosing a Path to Sell a Business<\/strong><\/h2>\n
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Hiring a Broker<\/strong><\/h3>\n
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Selling Directly<\/strong><\/h3>\n
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Going to Auction<\/strong><\/h3>\n
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Where to Sell Your Business<\/strong><\/h2>\n
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Make a list of potential buyers.<\/h3>\n
Create a plan for outreach.<\/h3>\n