Preparing Your Business for Sale: A Comprehensive Guide

Selling your business is a significant and often life-changing event. Whether you’re looking to retire, pursue a new venture, or simply cash in on your hard work, preparing your business for sale requires strategic planning and execution. This article will guide you through the essential steps, including attracting the right buyers, understanding the role of brokers, and potentially using online platforms like BizBuySell.com and Empire Flippers.

Step 1: Know Why You’re Selling

Before preparing your business for sale, it’s important to understand why you’re selling. Your motivations will influence how you position the business and negotiate the sale. For example, if you’re retiring, you may prefer an upfront payment. If you’re pursuing other ventures but want some continued involvement, you might prefer an earn-out structure with phased payments based on future performance.

Understanding your objectives also helps you communicate clearly with buyers. When buyers understand your motivations, they can structure offers that align with your goals — especially important if your business is built around your personal brand.

Step 2: Get Your Financials in Order

Buyers will carefully examine your business’s financial health, so it’s vital to have accurate and up-to-date records. Organize tax returns, profit and loss statements, balance sheets, and other relevant documents. Many sellers hire an accountant who specializes in business sales to help prepare these.

Business buyers often use two key financial metrics: Seller’s Discretionary Earnings (SDE) for small businesses and EBITDA for larger ones. Preparing your financials according to these standards helps buyers understand your business’s true value.

Step 3: Reduce Owner Dependence

This step applies to businesses with multiple employees. If you are a solopreneur, it does not apply since **you are the business**.

If your business relies heavily on you, buyers may hesitate. Start delegating responsibilities and documenting processes. Creating an operations manual is essential, as it helps new owners maintain smooth operations after your departure.

Gradually remove yourself from customer-facing roles if your business is tied to your personal brand. This increases buyer confidence and boosts the business’s value.

Step 4: Value Your Business Accurately

Setting the right price is crucial. Undervaluing leaves money on the table; overpricing drives buyers away. Industry, revenue streams, and growth potential all affect valuation.

Hiring a valuation expert or broker can help. Brokers often have access to databases showing what similar businesses sold for.

Step 5: Create a Marketing Strategy to Attract Buyers

To sell your business successfully, you need to reach the right buyers. Options include:

1. Use a Business Broker — Brokers handle marketing, negotiations, and buyer screening.
2. Online Marketplaces — BizBuySell.com and Empire Flippers attract buyers actively looking to purchase a business.
3. Direct Outreach — Competitors or related businesses may be strategic buyers.

Advantages and Disadvantages of Using a Business Broker

Advantages:

1. Industry Expertise — Brokers understand pricing, negotiations, and paperwork.
2. Network Access — Brokers connect you to qualified buyers.
3. Maximizing Value — Their deal-structuring experience can increase your sale price.

Disadvantages:

1. Commission Fees — Often 10–15% for businesses under $1M.
2. Loss of Control — Brokers speak on your behalf during negotiations.
3. Longer Process — Finding the right buyer may take time.

Using Online Marketplaces: BizBuySell.com and Empire Flippers

BizBuySell.com

BizBuySell.com is one of the largest online marketplaces for buying and selling businesses.

Advantages:

1. Wide Reach — Thousands of buyers browse listings.
2. Cost-Effective — Lower fees than brokers.
3. Seller Control — You handle the listing and negotiations directly.

Disadvantages:

1. Limited Guidance — No broker expertise.
2. Lower Offers — Marketplace buyers may seek bargains.

Empire Flippers

Empire Flippers specializes in online business sales such as e-commerce, SaaS, and content sites.

Founded in 2011 by Justin Cooke and Joe Magnotti, the platform has grown into one of the most trusted marketplaces for digital assets, offering a thorough vetting process and buyer/seller support.

Advantages:

1. Targeted Audience — Buyers specifically looking for online businesses.
2. Vetted Listings — Reduced risk of fraud.

Disadvantages:

1. Higher Fees — More costly than BizBuySell.com.
2. Niche Focus — Not suited for brick-and-mortar businesses.

Preparing your business for sale requires organization, planning, and strategy. By reducing owner dependence, organizing financials, valuing your business correctly, and marketing effectively, you’ll position yourself for a successful sale.

Sidenote: We have members at The Works who’ve bought and sold businesses recently and can speak to their experience. These transactions happen right here in Gilbert all the time.

Seller Notes — and How They Can Work for Both Sides

Financing the purchase of a small business can involve creative deal structuring. One such option is seller financing (seller notes), where the seller carries a portion of the purchase price as a promissory note.

What Is a Seller Note?

A seller note is a form of debt financing where the seller agrees to receive part of the purchase price over time. The note outlines the interest rate, repayment schedule, and other terms.

Example:

• Sale price: $500k
• Buyer pays $350k at closing
• Remaining $150k financed by the seller
• At 6% APR over 48 months → monthly payment ≈ $3,522.75

Why Seller Notes Create a Win-Win

Seller notes provide confidence to buyers, flexibility in structuring payments, and reassurance to banks. Sellers often receive better valuations, faster closing timelines, tax advantages, and interest income.

Securing Seller Notes

Because seller notes carry risk, sellers may secure them with collateral, personal guarantees, or conditions related to business operations.

Transition Periods and Seller Notes

A transition period helps the buyer smoothly take over operations. Former owners often work with new owners to train staff, introduce customers, and explain systems — reducing confusion and buyer’s remorse.

Casual conversations like “We planned to convert that room into open seating” or “We were considering switching cleaning companies” can provide valuable context during the transition.

|Frequently Asked Questions (FAQ)

1. How long does it take to sell a small business?

Most small businesses sell within 6–12 months, depending on price, financial organization, and buyer demand.

2. What documents do buyers usually request?

Tax returns, P&Ls, balance sheets, contracts, leases, payroll reports, and SOPs.

3. How much is my business worth?

Most small businesses sell for 2–3× SDE; larger businesses sell for 3–6× EBITDA.

4. Should I tell my employees I’m selling?

Not until the deal is secure. Premature announcements can create fear or turnover.

5. Do I need a business broker?

Not always — but brokers usually increase the likelihood of closing and improve deal terms.

6. What is seller financing?

A financing arrangement where part of the purchase price is paid over time with interest.

7. Can I sell a business that depends heavily on me?

Yes, but you’ll likely need a transition period or earn-out.

8. How can I prepare financially for a sale?

Organize clean books, remove personal expenses, and prepare add-back schedules.

 

Can the American Dream Be Achieved by Building and Selling a Thriving Business?

The American Dream represents the belief that anyone can achieve success through hard work and determination. Building and selling a business is one of the most powerful reflections of that dream — combining innovation, independence, and financial freedom.

Entrepreneurs create jobs, innovate industries, and take on significant risk. Selling a business can be the culmination of years of dedication, providing financial security and opening doors to new ventures or retirement.

Many entrepreneurs reinvest in other businesses, mentor others, or become investors, keeping the cycle of innovation alive. In the U.S., access to capital, business resources, and opportunity makes this pathway especially achievable.

Ultimately, building and selling a business captures the essence of the American Dream — achieving success on your terms and leaving a legacy built through hard work and ingenuity.