The Ultimate Guide to Selling Your Business: From Valuation to Closing

Thinking about selling your business? This practical guide walks you through each stage - from valuation and preparation to negotiations, due diligence, and closing - so you can exit with confidence.

Want hands-on help right now? Get your free valuation or contact our team.

1) How to Value Your Business

Valuation is the foundation of a successful sale. Most small and mid-sized companies sell based on earnings multiples, adjusted for risk, growth, and industry dynamics.

Core methods

• Market multiples - apply a multiple to normalized EBITDA or SDE based on comps and risk profile.
• Discounted cash flow - project future cash flows and discount for risk and time value.
• Asset based - useful for asset heavy firms or distressed sales.

Start with a quick estimate using the free valuation request, then deepen your understanding with the Seller Guide sections on pricing strategy.

Drivers that push your multiple up

• Recurring revenue and diversified customers
• Documented processes and strong team
• Clean financials and reliable KPIs
• Defensible advantages and growth runway

2) Prepare For Sale Checklist

Strong preparation reduces surprises, speeds diligence, and increases price. Use this quick checklist, then review the detailed steps in the Seller Guide.

• Financials normalized - three years of accrual financials, TTM, add backs documented, tax returns aligned.
• Legal and compliance - entity records, cap table, contracts, licenses, IP, privacy and employment policies.
• Operations - SOPs, org chart, vendor and customer agreements, inventory controls, tech stack map.
• Risk clean up - open disputes, expiring contracts, owner dependency, single supplier or customer exposure.
• Growth story - 12-24 month forecast, pipeline, product roadmap, marketing plan.

Need help organizing? Read How StartExus Works to see the process end to end.

3) Finding and Qualifying Buyers

Quality of buyers matters as much as quantity. Build a list, protect confidentiality, and prequalify interest before sharing sensitive data.

Buyer types

• Strategic - competitors, suppliers, or channel partners who see synergies.
• Financial - individuals, search funds, or private equity seeking returns.
• Management or employees - internal buyers who already know the business.

When you are ready to go to market, list your business and reach qualified buyers on StartExus.

4) Marketing Package and Data Room

Your story sells the business, your data defends it. Create a concise teaser and a detailed confidential information memorandum, then host documents in a structured data room.

• Teaser - anonymous one pager with industry, highlights, headline metrics.
• CIM essentials - company overview, products, market and competition, financials with adjustments and KPIs, operations and team, growth plan.

See an overview of what buyers will expect in How It Works and the marketing section of the Seller Guide.

5) Offers and the Letter of Intent

Aim for multiple qualified offers. The LOI sets headline terms and locks in exclusivity while the buyer runs diligence.

Key LOI terms

• Price and structure - cash at close, seller note, earn out, equity rollover
• Working capital target and net debt treatment
• Exclusivity period and closing conditions
• Employment or transition agreements for owners

Compare offers apples to apples and ask questions via the platform - see FAQ for common deal questions.

6) Due Diligence - What To Expect

Buyers verify what your materials promise. Plan for three parallel workstreams - financial, legal, and commercial.

• Financial - quality of earnings review, revenue recognition, inventory, working capital, tax.
• Legal - contracts, IP, licenses, HR, privacy, litigation, environmental if applicable.
• Commercial - market sizing, churn analysis, cohort performance, vendor and customer calls.

Keep your data room current and track requests. Review the diligence expectations in the Seller Guide.

7) Purchase Agreement and Deal Structures

Once diligence is on track, you will negotiate and finalize the purchase agreement and related documents.

Common structures

• Asset sale - buyer purchases selected assets and assumes agreed liabilities.
• Stock or membership interest sale - buyer acquires the entity as is.
• Hybrid - tailored mix to optimize taxes and risk.

Economic levers

• Cash at close vs earn out milestones
• Seller financing or holdback for indemnities
• Working capital peg and true up

For a step by step view of how agreements fit into the workflow, see How It Works.

8) Closing and Post Close Transition

Closing formalizes the transfer and funds the purchase. After close, execute your transition plan to protect performance and earn outs.

• Final schedules, officer certificates, lender consents, lien releases
• Employee communications and customer vendor notices
• Handover of SOPs, passwords, licenses, and accounts
• 30-60-90 day operating plan and KPIs

Need help planning the handover? Check the transition tips in the Seller Guide.

9) Typical Timeline

1. Preparation - 1 to 2 weeks - clean up, CIM, data room.
2. Outreach - 2 to 6 weeks - teasers, NDAs, management calls.
3. LOI - 1 to 2 weeks - offers, selection, negotiation.
4. Diligence - 4 to 8 weeks - financial, legal, commercial.
5. Closing - 2 to 4 weeks - agreements, funds flow, consents.

Timelines vary by size and complexity. If you want guidance, contact us.

10) Common Mistakes To Avoid

• Going to market with messy numbers or undocumented add backs
• Sharing sensitive data before an NDA and buyer screening
• Accepting the first offer without testing competition
• Overlooking working capital targets and debt like items
• Underestimating time required for diligence and transition

Browse more tips on the StartExus Blog.

FAQ

Ready to explore a sale? Get your free valuation or list your business today. Questions? We are here to help.