Business Strategy
Selling a Business
Selling a business is often the biggest financial event of someone's life. Most sellers leave money on the table. Preparation and proper positioning make the difference.
When to Start Preparing
Ideally, 1–3 years before you want to sell. The best sales are planned, not rushed. Buyers are skeptical by nature — clean financials, documented systems, and a business that doesn't revolve around you will all command a higher price.
If you're thinking about selling in the next few years, now is the time to start making your business more valuable — and more transferable.
What Buyers Are Looking At
Clean financials
3 years of P&Ls, tax returns, and bank statements. Inconsistencies or unexplained drops in revenue raise red flags immediately.
Revenue trends
Growing revenue = higher multiple. Declining revenue = hard to sell regardless of price.
Owner dependency
If the business runs because of you specifically, a buyer is buying a job — not a business. Systemize and delegate before listing.
Recurring revenue
Contracts, subscriptions, and repeat customers are worth more than one-time transactions.
Documented processes
SOPs, training materials, and operational documentation make a business acquirable. Without them, buyers price in transition risk.
Deal Structure Options
Not all cash at close is realistic. Understanding your structure options helps you negotiate better:
All-cash at close
Clean but rare for smaller businesses. Buyers paying all cash often negotiate harder on price.
Seller financing
You carry a note for part of the purchase. Gets more buyers at the table and often commands a higher overall price. Requires trust in the buyer.
Earnout
Portion of price tied to future revenue or profit milestones. Bridges gap between your valuation and buyer's. Can become contentious without precise language.
Equity rollover
You retain a minority stake in the business post-sale. Common with PE buyers. Gives you upside if the new owner grows it.
Common Mistakes Sellers Make
- —Overpricing and sitting on the market — creates stigma and weakens negotiating position
- —Going with the first buyer instead of creating a competitive process
- —Not having financials cleaned up before engaging buyers
- —Telling employees or customers before the deal closes
- —Underestimating the time and emotional cost of the process
- —Ignoring tax implications — deal structure has major tax consequences
Whether you're actively looking to sell or just starting to think about it, I can help you understand where your business stands and what would make it more valuable to a buyer.
I work with business sellers to evaluate readiness, structure deals, and navigate the process.