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Advice for Selling a Business

Transworld handles everything from selling small businesses to handling very large strategic mergers and acquisitions.  Either way, selling a business is not easy. There are a lot of things to consider. How do you get buyers to compete so you can get the best sale value? What legal challenges await? What if your employees or customers find out? 

If you're thinking of selling your business, you should check out this video on hiring a broker. For local service, call (402) 213-9945.


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You may be thinking:

  • I want to sell my business. 
  • How do I sell my business? 
  • Can I get Free advice how to Sell a business? (YES!)
  • Is there a podcast on How to sell my Business? (YES!)
  • Do I do a stock transfer or an asset business sale?  (FIND OUT NOW
  • How long does it take to sell a business? (Although we've done some in less than 90 days, the NATIONWIDE AVERAGE IS 8.5 MONTHS and some take more than a year!)
  • How do people appraise a business?  (FIND OUT NOW)
  • How much is my business worth?  (FIND OUT NOW)
  • Can I get a Free business appraisal or business valuation? (CLICK HERE)
  • How can I plan now to sell my business later for top dollar?  (FIND OUT NOW)
  • How much does it cost to sell my business?  (FIND OUT NOW)
  • How much are Business broker fees? (FIND OUT NOW)
  • What is the typical Business broker commission?  (FIND OUT NOW)
  • Where can I get Forms for selling a business? (FIND OUT NOW)
  • How can I convert my business to a franchise? (CLICK HERE)
  • How do we determine business seller's discretionary earnings? (FIND OUT NOW)
  • How do we keep the sale confidential? (FIND OUT NOW)
  • How do we find a good business broker? (CALL US NOW)

We can answer all of your questions and more.  Please call (402) 213-9945 today for a free consultation.

For more than 40 years, Transworld has helped people sell, buy or develop franchises and independent businesses with in-person, confidential local service. If you want to sell your company, we value your business and promote it at no up-front cost. If you want to buy a company or franchise, we are a worldwide business brokerage firm to help you find the right opportunity. We also convert businesses into franchises and sell your real estate or find the right place to buy or lease for your business.

12 Steps to Selling A Business

Step One: Preparation

Before most businesses can be sold, it is necessary that the owner get three key aspects of their business in order - their financial documents, management, and their transition plan. These aspects encompass imperative assurances for a buyer in their purchasing decision and items the seller must organize to create the circumstances for a successful sale.

First and foremost, financial documents must be complete and organized to validate any claims the seller makes during the sale process. The most critical documents include three past years of Profit & Loss statements, Balance Sheets, and Tax Returns.

Second, management responsibilities should be laid out and well documented. This includes job descriptions and the responsibilities of both company employees and owners. When a new owner steps into their recently purchased business, the management team should be able to function as usual, like nothing had changed.

If a seller is involved in the day-to-day operation of the business, it is important that a transition plan (to transition the seller out of the day-to-day) be developed and acted on before a sale takes place. The more a seller can remove him or herself from business operations, the more saleable the business becomes.

When these three elements are in order, then a business owner is ready to list their business for sale. If a business owner needs to address these elements more fully or would like to build more value into their business, pursuing a Preparing to Sell program may be a more appropriate action than pursuing the market at this time.

Step Two: Building Your Team

Once a business is properly positioned for sale, the first step in the process of selling is to assemble a team of advisors. While each business transaction is different, a typical advisory team will be able to fully support any sale. This team includes a transactional attorney, tax planner or financial advisor, and business broker (business transaction advisor).

When building an advisory team it is important to ensure that each member has extensive experience in the process of selling businesses. The quality of the advisory team will largely dictate the likelihood of a sale and at what price the business is sold.


Step Three: Information Collection

Now that an advisory team has been built, the seller will engage with the business broker. The broker will collect information from the seller in order to develop the pitch book, marketing plan, and a market price opinion for the business. Requested items could include financial documents for the past three years and year-to-date, a copy of the lease or title of property, customer or employee contracts, and a seller interview.

The broker will use the collected information in conjunction with market statistics to develop marketing materials and determine a listing price for the business. Determining what a business is worth is a complicated process and can be handled in various ways. We have experts and well-developed processes for just this purpose. Ultimately, a broker is trying to determine what price a qualified buyer would be willing to pay for the business in the current market.

After all needed information has been disseminated, the broker will present the marketing plan and business listing information to the business owner.

Step Four: Marketing Your Business

One significant responsibility of a business broker is to match buyers and sellers. The plan to accomplish this task varies with each specific business and its industry.

Generally, activities are split into two categories: mass marketing and target marketing. Mass marketing includes activities such as internet advertising and other marketing. Transworld Business Advisors lists businesses on the www.tworld.comwebsite, and the five major businesses for sale websites: Bizquest.com, Businessbroker.net, bizbuysell.com, businessesforsale.com, globalbx.com. In addition, all our listings also appear on more than 150 other National, International & State websites. A broker will also develop target marketing activities like contacting companies and individuals that are already pre-qualified for purchase that may have an interest in the business in question.

Step Five: Buyer Inquiry and Screening

Buyers will be presented to a broker in various ways, stemming from efforts in mass marketing, target marketing, and connections as well as referrals. Every buyer will be required to sign a Non-Disclosure Agreement (NDA) for each business that they plan to pursue. The NDA protects both the current owner and the new potential owner by limiting the amount of individuals that have access to confidential information about the selling company.

High quality brokers will also meet with potential buyers and perform an interview to determine their wants and needs. This interview may include questions about their past experience, budget, timeframe and expectations. It is not uncommon for a buyer to be pursuing one opportunity while there is another business available that would better suit their needs, desires and qualifications. A good broker will have the knowledge and experience to direct a buyer in the right direction.

Buyers should also be prepared to disclose their financial capability and source of funds to the broker as part of their qualification process.

Step Six: Review of the Company

Following a buyer's qualification and their continued interest in a business a meeting takes place. The first meeting is between the broker and the buyer and a thorough overview of the company is discussed. However, financial documents like tax returns and profit and loss statements are reserved until the Due Diligence period.

At this stage, buyers will receive access to a financial recast, which is a summary transposed from the seller's provided financial documents. The broker will be able to answer high level questions about the company, including its structure, performance, market placement, growth projections, and its transition plan.

Step Seven: Business Tour

If after the first meeting, a buyer is ready to proceed with the transaction, a second meeting is scheduled and will include the presence of the seller. Where appropriate, this meeting is completed at the business and includes a tour of operations. It is at this time that the seller will be able to answer more specific questions about the business.

During the second meeting the seller may also present questions to the buyer concerning their background and their plans for the company. The development of a positive relationship between the seller and the buyer is a critical step toward being able to structure a deal for the business purchase and transition.

Step Eight: Business Sale Offer and Acceptance Agreement

The buyer may now be ready to make an offer to purchase the business. The offer must be in writing, and be accompanied by a monetary deposit via certified check. A seller should never discuss price verbally - let the broker work with the buyer to get them to provide an offer in writing.

A good Business Advisor will guide the buyer with an offer form that is fair to the interests of both the buyer and seller. It must contain an outline of the proposed deal structure, constructed to determine key items that will be significant to the sale.

These items include, but are not limited to, the following:

  • The price the buyer is willing to pay for the company
  • How those funds will be received,
  • The timeline of the transaction,
  • Any training and transition requirements of the seller,
  • A Non-Compete Agreement, and
  • The Length of the Due Diligence period.

The Offer is an extremely important tool in getting the buyer and seller on the same page. There is a period of time stipulated in the Offer for both parties to have their respective legal counsels review and comment on the Offer, and even if both parties sign the Offer Agreement it may be voided if the parties cannot agree on changes to the Offer Agreement that may be recommended within the period for legal counsel review.

In addition to the Offer, the buyer will also include a good faith deposit. This deposit is held in escrow by the Business Broker until the deal moves forward or the buyer moves on. The buyer is permitted to back out of the Offer Agreement at any time during the Due Diligence period (and for any reason) and receive a full refund of their deposit.

Step Nine: Due Diligence

Due Diligence is considered a period of validation for the buyer. It is during this time that the buyer may request any documents they would like to verify the claims made by the seller and broker. These documents typically include financial information like Profit and Loss Statements, Balance Sheets, Tax Returns, and Bank or Credit Card statements. A buyer may also want to review employment or customer contracts as well as lease agreements.

The Due Diligence period is usually limited to a specific amount of time that correlates to the size of the business. Generally a week or two is permitted for small businesses and up to a month for larger sized companies.

At the end of Due Diligence, the buyer has the opportunity to either proceed or void the Offer. Voiding will result in the cancellation of the Business Sale Offer and Acceptance Agreement and return of the good faith deposit. If the buyer does not void the offer prior to the end of the Due Diligence period, the Offer that has been accepted by both parties governs to close the deal. If after the Due Diligence period a party backs out without good cause and the other party does not want to back out, there may be costs to that party for not completing the Agreement.

Step Ten: Pre Closing

The time between Due Diligence and Closing includes a long list of tasks, facilitated by the broker, that need to be performed by the buyer, seller, and their respective attorneys. The broker will compile a list of these items and will then manage the process for them to be completed. Some of the more complicated tasks include the transfer of lease, setting up a new entity for the buyer, and the securing financing (if necessary).

Step Eleven: Closing

Today most closings are completed virtually. The Bill of Sale is drawn up and signed on the specified closing date. Other documents, prepared and signed on or prior to closing, are the Lease Transfer, Settlement Statement, IRS Form 8594 and/or an Agreement to Assignment of Tangible and Intangible Assets. Non-Compete Agreement and stipulations of how long the seller will assist the buyer after closing may be stipulated in one of these agreements, or in a separate agreement. These documents are completed by the Seller's and Buyer's respective financial and legal counsel. If applicable, there may also be documents required for closing related to proof of insurance, financing agreements, articles of incorporation, business name or trademark registration, consent from the Board of Directors, or a franchise agreement.

At the official closing date, certified checks must be provided by the buyer, and in some cases also by the buyer, distributed in accordance with the Settlement Statement.

Step Twelve: Training & Transition

The day of closing or soon thereafter, a closing meeting is held for employees of the company to alert them of the transition of ownership. This meeting is typically done with both the buyer and seller present. The conversation that takes place is extremely important to the company's continued success, thus it is constructed previous to the meeting. The training period will also begin immediately after closing.

Training involves the seller instructing and guiding the buyer, and any employees necessary, on responsibilities that will be assumed by all individuals. While this step of the process takes place after closing it should be considered of great import. A successful training and transition period poises the business for success from day one of its new ownership!

Although each company is different and individual details may vary, the process each deal follows will mimic the above described path. If you would like to discuss the sale of your business, please contact us for a complimentary consultation.

What Qualifies A Business To Be An M&A Transaction?


Large Business Mergers and Acquisitions are not something most business brokers can do.  Transworld has specialists who work specifically with larger business mergers.  There are several situations that could make your company qualify for our M&A department:

  • Your company has earnings greater than one million dollars. When businesses grow to this size, they become targets for acquisition by industry players.
  • Your business is too large for an individual buyer to purchase or finance through conventional methods. Once your company is worth multi millions, a single individual usually will not purchase it (most multimillionaires do not wish to work).
  • Your company is in an industry that is currently being "rolled up". In some industries, strategic buyers that want to consolidate the marketplace will purchase even small businesses.
  • Your business is experiencing incredible growth. If your company is running out of capital because of growth, it may be a merger and acquisition target.
  • You want to grow your company and perhaps retain some equity. If that is the case, you will need M&A expertise.

Contact us for free consultation

We provide confidential, professional advice for no charge.  For free consultation, just contact us and a professional Business Advisor will meet personally with you to advise you how to sell your business.

(402) 213-9945   |   jfullerton@tworld.com