Thinking About Selling Your Business? Start Here.
You’ve built something valuable. Whether you’ve spent 5 years or 25 years growing your business, the decision to sell is one of the most significant financial events of your life. Done right, selling your business can fund your retirement, finance your next venture, or give you the freedom you’ve been working toward.
Done wrong? You leave money on the table, deals fall apart, or worse — you spend months in a sale process that goes nowhere.
The difference between a smooth, profitable sale and a frustrating, drawn-out process almost always comes down to preparation. Businesses that are well-positioned for sale attract more buyers, command higher valuations, and close faster.
This guide walks you through exactly how to position your business for sale — from cleaning up your financials to reducing owner dependency to understanding who your most likely buyers are and how they’ll finance the purchase.
Why Preparation Matters More Than You Think
Most business owners dramatically underestimate how much preparation affects their sale outcome. Consider these statistics:
- Businesses that are properly prepared for sale typically sell for 20-30% more than similar businesses that aren’t
- The average time to sell a business is 6-12 months — poorly prepared businesses take longer and are more likely to have deals fall through
- Over 50% of business sale deals fall apart during due diligence, often because of issues the seller could have addressed beforehand
Preparation doesn’t mean misrepresenting your business — it means presenting it in its best, most accurate light so buyers can make confident decisions quickly.
Step 1: Get Your Financials Clean and Organized
Your financial records are the first thing every serious buyer will examine. Messy, incomplete, or inconsistent financials are the number one deal-killer in business sales.
What “Clean Financials” Look Like
- 3 years of tax returns that match your profit and loss statements
- Monthly P&L statements prepared by a bookkeeper or accountant (not hand-scrawled notes)
- Clean balance sheets showing assets, liabilities, and equity
- Documented add-backs: Every personal expense run through the business should be clearly identified and documented
- Sales tax filings that align with reported revenue
- Payroll records showing employee compensation history
Common Financial Cleanup Tasks
- Separate personal and business expenses: If your car payment, cell phone, and vacation travel are running through the business, that’s fine — but document them clearly as add-backs
- Resolve any tax issues: Back taxes, unfiled returns, or payment plans need to be addressed before listing
- Update your bookkeeping: If you’re 6 months behind on bookkeeping, get current. Buyers want to see recent financial performance
- Prepare a clear add-back schedule: List every owner-related expense with documentation. This makes it easy for buyers (and their lenders) to calculate true cash flow
Why This Matters for SBA Buyers (Your Largest Buyer Pool)
The majority of small business acquisitions are financed through SBA loans. SBA lenders have strict documentation requirements — they need clean, verifiable financials to approve a loan. If your financials are messy, SBA-financed buyers can’t get approved, and you’ve just eliminated the largest segment of qualified buyers.
Step 2: Reduce Owner Dependency
If your business can’t function without you, it’s much harder to sell — and it will sell for less.
Signs of Excessive Owner Dependency
- You personally handle all key customer relationships
- You’re the only one who knows how to do critical tasks
- Employees come to you for every decision, no matter how small
- Vendors and suppliers deal exclusively with you
- You don’t have documented processes or procedures
- You work 60+ hours per week and the business still needs you
How to Reduce Owner Dependency
- Hire and develop a management layer: Even one strong manager who can handle daily operations dramatically increases your business’s value
- Document your processes: Create standard operating procedures (SOPs) for every critical business function
- Diversify customer relationships: Introduce key customers to your team members so the relationship isn’t exclusively with you
- Delegate decision-making: Start empowering employees to make decisions within defined boundaries
- Take a vacation: Seriously. If you can leave for two weeks and the business runs fine, you’ve significantly reduced owner dependency
The Impact on Valuation
Businesses with low owner dependency typically command higher valuation multiples. A business that runs itself is worth more than a business that’s really just a job disguised as a company. Buyers are willing to pay a premium for a business they can operate without working 70 hours a week.
Step 3: Timing the Market
When you sell matters — both in terms of your business’s performance and broader market conditions.
Best Time to Sell
- When revenue is growing: Buyers pay more for businesses with positive momentum. A business showing 10-15% annual growth commands a significantly higher multiple than a flat or declining business
- When you’re not desperate: Sellers who need to sell quickly (health issues, burnout, financial pressure) almost always get lower prices. Start preparing 1-2 years before you want to sell
- When interest rates are favorable: Lower interest rates mean buyers can afford to pay more because their monthly debt service is lower. This directly affects your sale price
- When your industry is hot: Industry trends affect buyer demand and valuation multiples. Sell when your sector is attracting attention
Worst Time to Sell
- When revenue has been declining for 2+ years
- When you’re in the middle of a dispute (partnership, legal, landlord)
- When key employees have recently left
- When you’ve lost a major customer
- When your lease is expiring without renewal options
The 1-2 Year Preparation Window
The ideal approach is to begin preparing your business for sale 12-24 months before you actually want to close. This gives you time to:
- Clean up financials and maximize profitability
- Reduce owner dependency
- Address deferred maintenance or needed improvements
- Secure a favorable lease renewal
- Build a management team that can operate without you
Step 4: Working with a Broker vs. Selling Direct
Should you hire a business broker or try to sell your business yourself? Both approaches have pros and cons.
Selling Through a Business Broker
Pros:
- Access to a larger pool of qualified buyers
- Professional marketing and confidential listing
- Experience negotiating deal terms
- They handle buyer screening so you don’t waste time with tire-kickers
- Knowledge of market valuations and deal structures
Cons:
- Commission typically ranges from 8-12% of the sale price
- Some brokers list businesses and do minimal work to sell them
- Not all brokers understand SBA financing requirements
Selling Direct (For Sale by Owner)
Pros:
- No broker commission
- You maintain complete control over the process
- Direct communication with buyers
Cons:
- Smaller buyer pool — you’re limited to your personal network and basic online listings
- Confidentiality is harder to maintain
- Negotiation can get emotional when there’s no intermediary
- You may not know what your business is actually worth
- You’re running the business and trying to sell it at the same time
The Best Approach for Most Sellers
For businesses valued between $500,000 and $10 million, working with a qualified business broker is usually worth the commission. A good broker will more than earn their fee by attracting more buyers, negotiating better terms, and managing the complex sale process so you can focus on running the business.
Pro tip: When interviewing brokers, ask about their experience with SBA-financed deals. Since the majority of small business acquisitions use SBA financing, you want a broker who understands how SBA deals work and can present your business in a way that appeals to SBA-qualified buyers.
Step 5: Understanding Why SBA-Eligible Buyers Are Your Largest Buyer Pool
Here’s something many sellers don’t fully appreciate: the vast majority of buyers for businesses in the $500K-$10M range will use SBA financing.
Why SBA Buyers Dominate the Market
- Leverage: SBA loans allow buyers to acquire businesses with as little as 10% down. This dramatically expands the number of people who can afford your business
- Favorable terms: 10-year terms and competitive interest rates make the monthly payments manageable
- Government backing: The SBA guarantee reduces lender risk, making banks more willing to finance acquisitions
- Growing market: SBA lending for business acquisitions has grown significantly, with brokers like GoSBA Loans facilitating over $320 million in deals in 2025 alone
What This Means for You as a Seller
If your business isn’t positioned to appeal to SBA-financed buyers, you’re eliminating most of your potential buyer pool. Here’s what SBA buyers (and their lenders) need:
- Clean, verifiable tax returns: 3 years minimum, matching your P&L statements
- Sufficient cash flow: The business must demonstrate at least 1.25x debt service coverage
- Reasonable valuation: SBA lenders won’t finance overpriced deals. Your asking price needs to be supportable by the financials
- Willingness to carry a seller note: Most SBA deals require the seller to carry 10-15% as a standby note (no payments for 24 months)
- Adequate lease terms: The lease must cover the loan term (or have renewal options)
- Transition support: SBA lenders expect the seller to provide training and transition assistance
How to Make Your Business Attractive to SBA Buyers
- Ensure your financials are clean and well-documented
- Be prepared to explain all add-backs with supporting documentation
- Price your business fairly based on actual cash flow
- Be willing to carry a seller note with SBA-compliant terms
- Secure a lease with adequate remaining term or renewal options
- Offer a reasonable training and transition period
Step 6: Maximizing Your Sale Price
Beyond the fundamentals, here are additional strategies to maximize what you receive for your business:
Increase Profitability Before Listing
- Cut unnecessary expenses (but don’t cut so aggressively that it impacts operations)
- Renegotiate vendor contracts for better terms
- Implement price increases if the market supports them
- Focus on high-margin products or services
Diversify Revenue
- Reduce customer concentration — no single customer should represent more than 15-20% of revenue
- Add recurring revenue streams (service contracts, subscriptions, maintenance agreements)
- Expand your customer base through marketing and sales efforts
Strengthen Your Team
- Retain key employees with competitive compensation and clear roles
- Cross-train employees so no single person is indispensable
- Consider retention bonuses for key team members during the transition
Clean Up Legal and Operational Issues
- Resolve any pending legal matters
- Ensure all licenses, permits, and certifications are current
- Address any deferred maintenance on equipment or facilities
- Formalize any verbal agreements with customers, vendors, or employees
Ready to Sell? Make Sure Your Buyers Can Get Financed
You can do everything right — clean financials, reduced owner dependency, perfect timing — and still have deals fall apart if your buyers can’t secure financing.
That’s where GoSBA Loans comes in. We work with buyers seeking SBA financing for business acquisitions, and we can be an invaluable resource for sellers too:
- We connect qualified, pre-approved SBA buyers with businesses for sale
- We help structure deals that satisfy both buyer and seller while meeting SBA requirements
- Our network of 50+ lenders means your buyer has the best chance of getting approved — and closing on time
- We provide buyers with free business plans and financial projections (worth $2,500-$5,000), removing a common obstacle to deal completion
- We facilitate over $320 million in SBA deals annually — we know how to get deals across the finish line
If you’re preparing to sell your business, or if you have a deal in progress and the buyer needs SBA financing, we can help ensure the financing doesn’t become the reason the deal falls apart.
Want to make sure your buyer can get financed? Contact GoSBA Loans today. We’ll work with your buyer to secure the best SBA financing available — at no cost to you or the buyer.
