10 Essential Considerations When Selling Your Business

Selling a business is a significant decision, often marking the culmination of years, if not decades, of hard work, perseverance, and dedication. The process can be complex and emotionally charged, and being well-prepared is key to ensuring a smooth transition and achieving the best possible outcome. This article will provide a detailed checklist to help guide medium-sized business owners through the necessary steps in preparing for the sale of their business.

1. Begin Planning Early

Planning for a business sale should ideally begin years before the actual sale. This involves understanding the market, grooming potential successors, and positioning your business to be attractive to potential buyers. This also includes getting your financials in order, improving business operations, and resolving any potential legal issues.

2. Understand Your Business's Worth

It is critical to have an accurate understanding of your business's value. You may wish to employ a professional business valuator or use industry multiples as a starting point. Be prepared to justify your valuation to potential buyers.

3. Get Financials in Order

Buyers will want to see well-organized, clear financial statements going back several years. Ensure your profit and loss statements, balance sheets, and cash flow statements are up to date and accurate.

4. Legal Housekeeping

Address any outstanding legal issues that could become obstacles in a sale. This could include patent disputes, employment contracts, or outstanding litigation.

5. Organize Key Business Documents

Prepare a comprehensive portfolio that includes key business documents such as contracts with suppliers, customers, and employees; lease agreements; and a list of assets included in the sale.

6. Identify Potential Buyers

These could include competitors, customers, suppliers, or financial buyers like private equity firms. You may also consider using a business broker to help you identify potential buyers.

7. Develop a Sales Pitch

Your sales pitch should highlight your business's strengths, growth potential, and market opportunities. Be prepared to discuss your customer base, the uniqueness of your products or services, and your business’s strategic advantages.

8. Plan for Due Diligence

Buyers will want to scrutinize your business's financials, legal issues, customer base, and more. Prepare for this process by having all relevant information ready and accessible.

9. Prepare for Negotiations

Have a clear understanding of your bottom line and be prepared to negotiate price, terms, and conditions. Also, consider involving a lawyer or business advisor in this process.

10. Plan for the Transition

Post-sale transition can be a delicate process. Have a clear plan for how you will transition the business to the new owner to ensure a smooth handover and minimal disruption to the business.

Selling your business can be a complex process, but with careful planning and preparation, you can position yourself for a successful transition. Remember, it's okay to seek professional help in areas where you're unsure. Accountants, business brokers, and legal advisors can all provide valuable assistance during this significant moment in your business's lifecycle.


Written and published by IG Wealth Management as a general source of information only, believed to be accurate as of the date of publishing. Not intended as a solicitation to buy or sell specific investments, or to provide tax, legal or investment advice. Seek advice on up to date withholding rules and rates and on your specific circumstances from an IG Wealth Management Consultant. Trademarks, including IG Wealth Management and IG Private Wealth Management are owned by IGM Financial Inc. and licensed to its subsidiary corporations.