What should you decide before approaching buyers?

Write a short description of the transaction you want. List the equipment, stock, name and other items you intend to include. Ask your lawyer to clarify whether you are proposing a sale of ownership interests or particular business assets.

Set your personal conditions

Decide how much involvement you would accept after the sale. Specify whether you want an immediate departure or a defined period of training. Put your preferred payment arrangement beside that decision.

• Write your reason for selling in plain language.
• Identify everyone who needs to participate in the decision.
• Separate included items from items you want to keep.
• Set a private minimum outcome to discuss with your advisers.
• Choose a fallback if no suitable offer arrives.

Hypothetical example: You own a small design studio and want to change careers. Before describing it as a complete business for sale, list which projects, equipment and brand materials you propose to include. Ask advisers to review the treatment of client agreements and unfinished work.

For this guide, an exit strategy means your plan for leaving ownership or day-to-day responsibility. Give yours a practical endpoint: what must be paid, handed over and completed before you consider your involvement finished?

If you mainly need funding and still want to run the business, also review how to find investors for a small business. Write down which decision you are actually trying to make before preparing a sale proposal.

What documents should you prepare before selling?

Build a folder that lets you answer questions with records. Treat the following as a preparation checklist, then ask your advisers what additional documents your transaction needs. Do not describe it as a universal legal requirement.

Explain the numbers before presenting them

Choose a consistent reporting period and label it clearly. Ask your accountant to reconcile differences between accounts, sales reports and bank receipts. Keep explanations beside the figures instead of expecting a buyer to reconstruct them.

For your preparation worksheet, separate invoiced sales, money received and payments still due. Work through your outstanding balances using this small business cash flow guide. Mark disputed or uncertain amounts for review.

Make a separate list of tasks you personally perform. Include quoting, purchasing, complaints and routine administration. Ask someone familiar with the business to check for work you have forgotten to mention.

Hypothetical example: An online shop owner packs orders every evening but has never recorded that time. In the sale folder, document the packing process and ask for an estimate of replacement staffing costs. Present the existing records and the proposed adjustment separately.

Use the preparation questions in hiring the right employee to describe responsibilities clearly. Avoid promising that someone can take over until you have explained the actual work.

How is a business valued before selling?

Ask for an estimate supported by clear assumptions. Business valuation is the process of estimating the economic value of an ownership interest. The valuation overview defines this scope.

Ask what sits behind the price

Request a plain-language explanation of the selected method. Ask which records were used, which assumptions remain uncertain and what is included in the estimate. Keep the asking price and the supporting calculation in separate fields.

The SBA outlines income, market and asset approaches: examining future income, comparable sales, or assets less liabilities. See its business sale guidance. Ask your valuation adviser which approach fits the business and why.

• For an income estimate, request the assumptions about future trading.
• For a market comparison, ask whether examples are completed sales.
• For an asset calculation, check the inventory and liabilities included.
• For every approach, ask how your departure has been considered.

Do not choose an earnings multiplier simply because another owner mentioned it. Ask what evidence supports using it for your particular business. If useful comparison data is unavailable, identify that limitation in the discussion.

Before commissioning the estimate, prepare a short strengths-and-risks note. Use a small business SWOT analysis, meaning a review of strengths, weaknesses, opportunities and threats. Attach evidence to each point you want a buyer to consider.

Keep proposed improvements separate from completed changes. If you plan to reduce an expense, show the existing cost and the proposed saving as different entries. Use your cost reduction review to identify questions, without presenting possible savings as achieved results.

How do you find a buyer for your business?

Build a shortlist around who could operate or integrate the business. Consider existing partners, relevant operators and people introduced through trusted professional contacts. Write a specific reason for approaching each candidate.

Prepare a limited first introduction

Draft a brief description covering the sector, broad location, proposed sale scope and your preferred transition. Leave customer identities and detailed financial records out of this first version. Ask your adviser to review what you should disclose next.

If you consider a business broker, meaning an intermediary helping with the sale, request a written explanation of their service and fees. Ask who approves introductions and how confidential information will be handled. Review the engagement before sharing your full folder.

1. Ask why the candidate wants this particular business.
2. Find out who would run it after completion.
3. Discuss how they intend to fund the purchase.
4. Ask what evidence they can provide of their ability to proceed.
5. Agree which information is needed for the next conversation.

Use the same questions for each candidate. Keep a record of documents requested, answers supplied and unresolved issues. Set a clear next step after every meeting.

Due diligence means the buyer's detailed checking of the business information. Prepare a question log for that stage, with an owner and supporting document for each answer. Ask your lawyer to arrange appropriate confidentiality terms before wider disclosure.

How should you compare offers and plan the handover?

Compare price, timing, conditions and your remaining responsibilities together. Ask each serious buyer for an offer that states those points. Keep unanswered items visible instead of filling them in with assumptions.

Hypothetical example: A maintenance company receives two offers. One proposes a larger amount paid over time; the other proposes less with payment at completion. Ask your advisers to compare payment risk, conditions and the amount you expect to retain before choosing.

Give your lawyer a clear agreement brief

A business sale agreement records the transaction terms. The SBA recommends legal review of that agreement. Its guidance includes preparing a sales agreement. Use the following as discussion points for your lawyer.

• Identify the parties and exactly what is being sold.
• Clarify treatment of stock, outstanding invoices and liabilities.
• Specify payment timing and discuss safeguards for delayed payments.
• Agree conditions that must be satisfied before completion.
• Define how the business will operate during the sale process.
• Set the scope and end date of your transition support.

Completion means the agreed point when the transaction is carried out. Ask your advisers to document the sequence of payment, signatures and transfers. Confirm who verifies that each step has happened.

Prepare a handover sheet for keys, equipment, operating instructions and digital access. Name the person receiving each item. Check the transfer rules for each digital service before promising that an account can change hands.

Set boundaries around support after the sale. Specify the tasks you will explain and how questions should reach you. Avoid leaving your availability as an open-ended promise.

What can you complete this week?

Use your first week to make the proposed sale reviewable. Aim for a clear scope, a usable records folder and an adviser question list. Adapt this suggested schedule around your normal operations.

1. Day one: write your sale scope and personal conditions.
2. Day two: collect financial records and flag unexplained differences.
3. Day three: list assets, agreements and owner responsibilities.
4. Day four: prepare valuation and legal questions.
5. Day five: draft the introduction and identify potential buyers.

Review the folder before contacting anyone. Remove unsupported claims, label estimates and assign responsibility for missing information. Keep running your normal reporting process while preparing the sale.