Selling your business is a big deal—financially and emotionally. The goal isn’t just to find a buyer; it’s to know that you and the business are truly ready for the handoff. Starting early and getting organized can make the sale smoother, more profitable, and less stressful.
Below are five clear signs you’re on the right track.
Buyers want clarity. If your books are messy or incomplete, buyers worry—and that can lower offers or kill deals. At a minimum, be ready with 3–5 years of profit & loss statements, balance sheets, and cash‑flow statements, plus tax returns that support those numbers.
Many buyers (and lenders) also use a Quality of Earnings (QoE) review to verify EBITDA, revenue, and working capital. Getting a sell‑side QoE done ahead of time can surface issues before you go to market and build buyer confidence.
Tip: The Small Business Administration (SBA) also points owners to valuation/appraisal resources and emphasizes thorough prep before transferring ownership or selling.
Many business owners overestimate the value of their company, often due to emotional attachment or outdated benchmarks. A professional business valuation provides an objective view of your company’s worth based on:
Knowing your value helps you set realistic expectations, negotiate confidently, and plan for the financial impact of the sale on your retirement.
Buyers want to know that the business can run without you. If your company relies heavily on your personal relationships, expertise, or daily involvement, it may be seen as a risky investment.
A strong transition plan includes:
The more transferable your business is, the more attractive it becomes to potential buyers.
This isn’t just a financial transaction—it’s a life change. Industry surveys note that many owners report regret after selling when they haven’t planned for “what’s next” personally. Having a post‑sale plan—work, hobbies, family, giving—helps you make clear decisions and avoid second‑guessing.
Try asking yourself: Am I ready to hand over control? Do I have a vision for my next chapter? Have I talked this through with my family? (Simple questions, big clarity.)
Your sale proceeds should support your lifestyle, protect your wealth, and reflect your values. That means modeling post‑sale income, building a tax plan, and coordinating estate/legacy goals.
Also, deal structure matters. Asset sales and stock (equity) sales can be taxed differently, and each route has trade‑offs for buyer and seller—work with a CPA and deal attorney to choose what fits your situation.
Selling is a journey, not a one‑day event. The earlier you start preparing, the more options (and leverage) you’ll have. If you’re even 2–5 years out, begin cleaning up the books, building transferability, and mapping your personal plan now. Future‑you will be grateful!
Disclaimer
The information provided in this article is intended solely for educational purposes. It is designed to offer insights into financial planning and family wealth strategies, aiming to enhance understanding of financial concepts and decision-making. This content should not be interpreted as personalized investment advice or a recommendation for any specific strategy, financial planning approach, or investment product. Financial decisions are deeply personal and should be made considering the individual’s specific circumstances, goals, and risk tolerance. We recommend consulting with a professional financial advisor for personalized advice