Steps to Sell your Business

Business owners in the process of selling their business usually have a challenging task at hand with understanding what buyers look for in a business for sale. Here we are going to talk about the steps to sell your business.

There are some key things you would have to prepare and have complete to get a buyer interested quickly. Here are 15 key steps to sell your business for sale below:

  1. Prepare Historical Financials
  2. Prepare Financial Projections
  3. Prepare 2 years completed Tax Returns
  4. Proof of Corporate Documentation
  5. Provide Capitalization Structure
  6. Provide Product Overview
  7. Overview of Suppliers and Vendors 
  8. Overview of Business Model 
  9. Overview of Customer Concentration
  10. Prepare Management Team Biographies 
  11. Prepare Sales Team Biographies
  12. Prepare Compensation Structures
  13. Prepare Marketing Strategy
  14. Prepare Sales Strategy
  15. Prepare Growth Strategy

In general, when selling a business this is what buyers want to see off the ‘bat’ when looking at any company for sale. The steps are not exactly in order but are assorted similarly.

It is also not an exhaustive list of steps you would need to take to effect a successful sale, but they are the first-line items any acquirer or buyer will want to see upfront.

I’ll break down the rationale behind the steps above to sell a business, so it makes sense to you. As I know a lot of companies think of selling their business, for them this type of information is somehow ‘special’ or worth being called confidential, but in most cases, when selling a business, they really aren’t, and making it tedious to get this type of data from a seller just discourages buyers out of the gate.

Let me jump in and tell you why these steps are necessary to get you moving quickly with serious buyers.

Here is the breakdown of the 15 steps to sell your business successfully

The question is, can you prepare this information in a timely manner or do you need help with this proccess?


Selling a company or firm is mainly based on the financials of the firm. This is a critical aspect of showcasing how well or not your company has done over the years.

This is what sellers have to showcase, so as to improve their selling chances. Buyers typically want to see at least 3 years of historical financial information.

This is somewhat of a scorecard that gives a good indication of past performance and how the company has or has not grown over the years. Even if the seller experienced a ‘not so good year, there might be a rationale behind the cause which should be highlighted by the seller. Any discussions should be highlighted which are happening with management to present the financials.


In this step, the seller should want to highlight the best guess and selling points, based on customer feedback, current sales activities, pending contracts, or growth trends, and where the company is going to be for all the line items of the sellers’ financial statement.

This is a forward-looking scorecard for predicting future performance. Which ‘no doubt may or may not provide hope to potential buyers of your business. A separate post would be provided on this as well, which would get into lots more detail as to how financial projections should be done properly for the average seller, selling a business.


In this item it goes without saying, no one wants to be looking at a company that is indebted to the government. This is a risk no investor wants to acquire. Therefore this is something sellers should disclose upfront. It just makes the process smoother and retains trust.

No one wants to spend a whole bunch of time talking about all the wonderful things about your company, to then find out that your company hasn’t been paying its taxes. That’s a deal killer right there for any seller! Imagine selling a company without its taxes completed?

Yes, some people may be reserved about this because it has your personal information in there, but sellers have to take into account that they are trying to sell something a product which is essentially an investment.

So even if the seller doesn’t want to provide the actual documentation upfront it would be good to at least ensure that you have them readily available for disclosure when the discussions prove serious with a buyer.


Another aspect of selling a business is where buyers and sellers are going to be dotting their I’s and crossing their T’s.

Buyers are always on the lookout for a good business opportunity and good sellers to buy businesses from. Therefore time preservation is key. No investor wants to waste time looking at opportunities from sellers that aren’t set up right with their government and state.

So these documents need to be ready to go at a moment’s notice.


This may not apply to a sole proprietor or a one-man LLC with no real investment into the company, but for LLC’s and Corporations with real investments or capital structure, whether it’s from you the seller, friends, family or institutional investors, or the bank, buyers will want to know what and who they are dealing with here.

Selling your company in some cases can get problematic with partners and co-investors if everyone is not on the same page with the sale of the company. So when selling your business, be sure to have this information readily available so it’s clear to buyers who are involved in the process of selling the business.

Again, just another upfront precaution for both the seller the buyer, and the seller’s partners or financiers.


Most sellers should be able to provide this information as it is usually what all sellers know best. A nice summary of the products or services the seller provides, and how they solve customers’ problems. This is great information for the seller to provide, as it makes selling the business much more attractive.

Also merging it with how it’s a value-added proposition within your industry is also compelling for buyers to know.


Suppliers and Vendor information is also great information to compile as it indicates any concentration there may be as well as any room for efficiencies that can be added to strengthen the supply structure of the business.

logistics, supply chain, technological and pricing factors can be built up more robust depending on the right buyer stepping in. So this would be a good time to showcase any advantages to the way you do business to entice buyers to your business.


A Business Model simply explains in a structured way how the company does business. Meaning, illustrating such things as the industry you are in and how you are serving that industry which is formatted in a way that is easy to understand.

Here you would want to showcase how the different aspects of your business are linked and the trickle-down effect towards providing a solution to your customer’s problems such that you make a profit.

Needless to say, this has to be concise, very summarized, structured, and well-formatted for the buyer to grasp quickly.


A typical sticking point for most buyers looking for good businesses to acquire. Customer concentration is your list of customers or clients as it relates to your revenue and the distribution of customers as a percentage.

This means that if you have 10 customers with $5,000,000 in revenue with 1 customer providing a revenue stream of 25%, then that customer is responsible for $1,250,000 of revenue. In a case where you lose this customer, it can be detrimental to the business if your Net Profit is 15% of that revenue ($750,000). You’d be at a loss of $500,000.

Therefore this needs to be understood prior to thinking about your valuation as well. I have seen where some companies have 25%, 40%, 60% even 75% customer concentration and because they may be a ‘big name’ client or customer they somehow think this is a good thing. From an investment perspective, it truly is scary.

So be careful with this one and be prepared to fully explain your customer concentration as it varies from industry to industry and buyer to buyer.


People run businesses. They don’t run themselves. I don’t care how Sophisticated the business is. Buyers want to know about the Management team and their background.

Whether they are competent and qualified to do the job or whether they need some extra hands on deck to get the thriving. People are the key to the longevity of any business and ultimately are the ones who would be managing the affairs of someone’s new investment.

So don’t view this as an additional burden. It’s well worth your while if you do have a team worth boasting about to do so. If you don’t, then I am sure you have a compelling story as to how you achieved all that success without a great management team.


Just like the management team. A sales team is usually critical for most businesses and buyers want to know what and who is driving all that revenue. So it’s very helpful to know the experience, qualifications and training levels of your sales team.

A sales team is one of the most important parts of a business if not the most important part. This is the engine of your business and a buyer is going to want to inspect it.

Save the anticipation and prepare a summary of these biographies. it will be impressive to a buyer to know you are trying to provide as much pertinent information as possible.


Here is another area where you may want to be cautious about providing this information upfront. But ensuring that it has already been prepared and formatted for communication with a buyer would show your seriousness about selling.

Salaries and compensation are usually the largest expense for any company and for some businesses that are very straight forward this area may not be applicable.

For companies with incentive plans, commission structures, phantom equity, or ESOP’s for sales teams or staff in general. You will want to indicate this to buyers as part of proposing the business for sale sooner than later. So they know what they will be getting themselves into.

I’ve seen where random information that should have been shared earlier, pop up and kill deals after a lot of time and effort has been invested.


Understanding the marketing strategy for a firm is key for an investor or buyer. It tells them the mindfulness of the owners and management team regarding maintaining stable pipelines of business as well as whether the company has stalled for growth or planning to grow rapidly.

This is important because it is an indication of future working capital, needs. This is critical for buyers to plan for when looking at a business for sale.

It surprises me sometimes when companies can’t provide a 5 liner on what their basic marketing strategy is, or going to be. I am not saying do a 40-page marketing plan here. Sometimes a 5 liner works. Buyers ultimately want to know that they are investing in people who are constantly thinking about moving the company forward.


Your sales strategy maybe a 5 liner but usually might be more as it speaks to your lead generation process (how you source and interest customers), pipeline (how many customers you have interested and the quality of customers), conversion process (how you convert the pipeline to dollars), staffing process and more. But usually, these are some key items in your sales strategy.

Buyers need to know this so as to know the current sales capabilities of the company they are attempting to purchase. Unless a buyer plans to buy a company so they can sell everything themselves they would want to know what the company has in place to continue generating revenue and whether there is a method to the madness.


The growth strategy ties the marketing strategy, sales strategy, financial projections, and business model together. This way it all makes sense to the buyer and the company doesn’t seem scattered in its thinking.

It shows a clear path to the projections and its working capital needs to get there. It tells a story that is well-rounded and allows the buyer to get into the minds of management but to also see where the buyer themselves can be of added benefit to the company and help in this process.

Many buyers have growth plans of their own and want to ensure there are no conflicts of interest between them and the company.

In Closing 

This may seem like a business plan which I know a lot of people are wary of doing, but it is not. It’s different. It is the critical aspect of a CIM (confidential information memorandum).

Which an advisory firm or investment bank puts together for sellers. Here we are trying to cut through the noise where that is concerned and empower you to do it yourselves because it is pretty straightforward to comprehend.

Sometimes people do need help with this and should seek advice where applicable or burdensome. Though it’s always good to cut through the noise and deal with buyers directly. Save you time, money, and stress.

Data Processing and Hosting Services

The Data Processing and Hosting Services industry provides infrastructure used for a variety of information technology (IT)-related activities, ranging from online hosting to automated data entry services.

Over the five years to 2021, businesses have increasingly outsourced their IT infrastructure needs, directly benefiting industry operators.

The advent and popularization of cloud computing, one of the industry’s fastest-growing product offerings, has similarly led to greater demand.

As a result, the industry has fared well during the majority of the five-year period, with revenue expected to grow at an annualized rate of 5.0% to $196.5 billion.

However, the COVID-19 (coronavirus) pandemic is expected to lead to a decline in business investment in industry services, although this was tempered somewhat by increased usage of industry services in other capacities.

Industry revenue is expected to increase 1.7% in 2021, as the overall economy recovers from the economic fallout of the coronavirus pandemic.

Profit is expected to decline slightly over the five years to 2021, as growth earlier in the period is countered by declines in later years.

Beef and Pork Wholesaling

The Beef and Pork Wholesaling industry has experienced favorable conditions over the five years to 2021.

The industry, which serves as the middleman between beef and pork producers and retailers, is expected to perform well as both consumer spending and consumption of beef and pork rises.

Prices of key inputs, such as corn and diesel, have risen during the five-year period, increasing operating costs.

Although operators have dealt with recent studies linking beef and pork consumption to heart disease and shifting consumers’ tastes, the industry has shown resilience as operations have expanded.

Revenue has been on a steady growth during the five-year period.

However, the restrictions placed on the economy as a whole due to the COVID-19 (coronavirus) pandemic led to a decrease of 0.9% in 2020.

This contraction in revenue was offset by the increase in per capita disposable income as a result of enhanced employment benefits and stimulus checks.

As the economy begins to reopen in 2021 and the easing of restrictions occurs, consumer spending is expected to increase due to pent-up demand.

Consequently, research estimates industry revenue to increase at an annualized rate of 2.4% to $91.4 billion over the five years to 2021, with a 2.0% growth in 2021 alone due to the expected economic rebound.

Beer Wholesaling

Revenue growth for the Beer Wholesaling industry has been hindered by shifting alcohol consumption trends among consumers, particularly millennials.

Americans have been consuming less beer and opting for alternative alcoholic beverages.

However, the industry has continued to benefit from laws that prevent the vertical integration of breweries and retailers.

After the Prohibition era, nearly every state enacted a three-tier distribution system, requiring three distinct levels within the alcoholic beverage supply chain, including producer, distributor and retailer.

As a result, beer wholesalers have a protected role, purchasing beer from producers before storing and transporting it to downstream retailers.

Research estimates that industry revenue has grown at an annualized rate of 2.3% to $82.9 billion over the five years to 2021.

Since 2020, the COVID-19 (coronavirus) pandemic has resulted in rising demand for industry operators, with revenue projected to rise 1.0% in 2021 alone.

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