How to Sell Your Business: A Business Broker’s No-Nonsense Guide

So, you’re thinking to sell your business.

Maybe you’ve spent twenty years building it, or maybe you’re simply knackered from the daily grind and fancy a change. Or perhaps you’re seeing dollar signs dancing in your dreams, thanks to a hot market. Whatever your reason, one thing’s certain: if you want to sell your business you better be prepared.

I’m a business broker. I’ve helped owners just like you sell businesses ranging from tidy little Main Street shops to multi-million-dollar enterprises. And here’s the truth:

Selling a business isn’t like selling a car, a house, or your cousin’s old PlayStation on eBay. It’s a labyrinth of valuation, negotiation, contracts, emotions, and secrets (yes, secrets).

But done right, when you sell your business, you can set you up for the next big chapter of your life—financially, emotionally, and professionally.

In this guide, I’m lifting the curtain on how the process really works. I’ll cover:

• Why selling your business is different from selling anything else
• How to value your business realistically (without smoke and mirrors)
• Why confidentiality is critical
• The steps in the sale process
• Common mistakes that cost sellers big money
• How a business broker helps you win (and when you might not need one)
• Tips for getting the highest price
• FAQs from real business owners

And by the end, you’ll know how to approach your sale strategically—and avoid getting taken to the cleaners.

Let’s get into it.

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Why Selling a Business is Unlike Selling Anything Else

First things first: a business isn’t a thing. It’s not a piece of property you can hold in your hands.

Your business is:

• Cash flow (the lifeblood of valuation)
• Employees and their institutional knowledge
• Customer relationships
• Systems and processes
• Reputation and goodwill
• Contracts, leases, and licenses
• Equipment, inventory, or intellectual property
• And let’s not forget… your blood, sweat, and tears

When buyers look at your business, they’re not simply buying “stuff.” They’re buying future earnings—and the risk that comes with them.

This is why business sales involve:

• Due diligence (financial, legal, operational)
• Confidentiality agreements
• Detailed financial recasting
• Complex negotiations over price, terms, and contingencies
• Bank financing or SBA loans
• Legal contracts that make War and Peace look like light reading

The stakes are high. A mistake could cost you hundreds of thousands—or tank the deal entirely.

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How to Value Your Business (Without Smoke and Mirrors)

Let’s talk about the elephant in the room: business valuation.

This is the single biggest question every seller has:

“How much is my business worth?”

Here’s my Irish truth-teller moment: It’s worth whatever a willing buyer will pay… and a bank will finance.

But we brokers use certain methods to estimate market value, including:

1. Seller’s Discretionary Earnings (SDE)

For small businesses (Main Street deals), valuation usually starts with SDE. This is your net profit plus:

• Your owner’s salary
• Perks and discretionary expenses (think your cell phone, car payments, sometimes the dog’s daycare if you’re cheeky)
• Interest, taxes, depreciation, and amortization (for comparability)

A multiple is then applied—often 1.5x to 3.5x SDE, depending on:

• Industry
• Risk profile
• Growth potential
• Size of the deal

2. EBITDA Multiples

For larger businesses, buyers look at EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization). Multiples range from 3x to 6x (sometimes higher) based on risk, size, and industry.

3. Asset-Based Valuation

Relevant for businesses where assets drive the value, e.g., equipment-heavy operations. But most going concerns sell based on earnings, not assets alone.

4. Comparable Sales

We brokers look at databases of similar sold businesses to benchmark your price.

Beware:

• Your accountant’s balance sheet ≠ market value.
• Rules of thumb can mislead you.
• “My buddy sold his business for X” is not evidence.

Get a professional valuation. It’ll save you from listing too high (no buyers) or too low (leaving money on the table).

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Confidentiality: Why Silence is Golden

One of the biggest mistakes sellers make?

Telling the world their business is for sale.

Loose lips sink ships—and deals. If word gets out:

• Employees panic and jump ship
• Customers take their business elsewhere
• Competitors spread rumors
• Vendors tighten credit terms

A professional broker uses blind listings. We advertise:

• Industry type (e.g. “Profitable Commercial HVAC Business”)
• General location (e.g. “Triangle Area of North Carolina”)
• Financial highlights

…but we keep your name, exact address, and other identifying details under wraps.

Before a buyer gets the secret sauce, they sign a Non-Disclosure Agreement (NDA). Protect your baby—and your value.

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The Steps to Sell Your Business

Here’s how a typical business sale unfolds:

Step 1: Valuation and Pricing Strategy

• Recast financials to reflect true owner benefit
• Identify market comps
• Set a realistic price range

Step 2: Marketing the Business

• Create a blind listing
• Develop a confidential business review (CBR) or offering memorandum
• Advertise on broker networks, buyer lists, and websites

Step 3: Buyer Screening

• Qualify financial capacity
• Check industry experience
• Ensure cultural fit

Step 4: Offer and Negotiation

• Letter of intent (LOI) outlines price and terms
• Negotiate deal points (earnouts, seller financing, training periods)

Step 5: Due Diligence

• Buyer reviews financials, legal docs, operations
• Usually takes 2–6 weeks

Step 6: Financing

• SBA loan application (if needed)
• Lender due diligence

Step 7: Closing

• Final contracts drafted
• Signatures exchanged
• Money wired
• Keys handed over (sometimes with tears, always with relief)

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Common Mistakes Sellers Make (and How to Avoid Them)

Let me spare you some pain. Here are classic blunders:

❌ Overpricing the Business

Everyone wants top dollar. But listing too high means your business sits stale while buyers sniff around better-priced deals.

❌ Poor Financial Records

Buyers—and banks—will dissect your books. If your records are sloppy, your value drops like a stone.

❌ Telling Employees Too Early

Until a deal is nearly done, keep quiet.

❌ Doing It Alone

Sure, you can sell your business yourself. But unless you love handling:

• Buyer negotiations
• Legal minefields
• Emotional rollercoasters
• Endless paperwork

…you’ll likely leave money on the table—or blow the deal entirely.

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How a Business Broker Helps You Win

Think of a business broker as your:

• Valuation expert
• Confidential marketing specialist
• Tire-kicker filterer
• Negotiator
• Deal shepherd

Good brokers:

• Maximize price and terms
• Maintain confidentiality
• Save you time and sanity
• Help navigate financing and due diligence

Most brokers work on a success fee (a percentage of the sales price). If the deal doesn’t close, you owe nothing but possibly a modest marketing fee.

When might you not need a broker?

• The buyer is already known and trusted
• The business is very small
• You’re comfortable with valuation, marketing, and negotiation

Otherwise, a broker’s fee is usually well worth it. The higher price they can secure when you sell your business often pays for their commission—and then some.

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How to Get the Highest Price for Your Business

Want the best outcome? Here’s my no-fluff advice:

✅ Start early. Exit planning should start 1–3 years before selling.

✅ Clean up your books. Get a CPA to organize financials. Kill unnecessary expenses that lower your SDE.

✅ Keep revenue steady or growing. Buyers pay premiums for growth stories.

✅ Document your processes. Make the business less dependent on you.

✅ Be realistic. The market, not your wishful thinking, determines price.

✅ Work with pros. Broker, CPA, and transaction attorney—your holy trinity.

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FAQs About Selling Your Business

How long does it take to sell your business?

Most small businesses sell in 6–12 months. Larger deals can take longer.

Do I have to offer seller financing?

Often, yes. Around 60–80% of small business deals involve some seller financing. It keeps skin in the game and makes buyers (and banks) feel safer.

Will I pay taxes on the sale?

Almost certainly. How much depends on:

• Asset sale vs. stock sale
• Capital gains rates
• Allocation of purchase price

Get a tax pro involved early.

How confidential is the process?

Very, if you use a broker. NDAs are standard.

How do I find the right broker?

• Check experience in your industry
• Ask for references
• Understand their fee structure
• Look for a broker who listens, not just talks

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TL:DR;

Here’s the hard truth, folks:

Selling your business is the biggest financial event of your life. Don’t mess it up.