sold business plans

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1. Identifying the Reasons for the Sale

2. deciding the timing of the sale, 3. getting a business valuation.

• 4. Should You Use a Broker?

5. Preparing Documents

6. finding a buyer, 7. handling the profits, how do you sell a franchise business, how do you sell a business idea, how do you sell a small business without a broker, how do you sell your share of a business, how much does it cost to sell a business, the bottom line.

• Small Business

7 Steps to Selling Your Small Business

Selling a small business is a complex venture that involves several considerations. It can require that you enlist a broker , accountant, and/or an attorney as you proceed. Whether you profit will depend on the reason for the sale, the timing of the sale, the strength of the business's operation, and its structure.

The business sale will also require much of your time and, once the business is sold, you'll need to determine some smart ways to handle the profit. Reviewing these seven considerations can help you build a solid plan and make negotiations a success.

Key Takeaways

• Identify why you want to sell your business and make sure it's ready to be sold.
• Take the time you need to prepare your business for sale, determine the value of your business, and consider hiring a business appraiser.
• Decide whether you want to hire a broker or negotiate the deal yourself.
• Once you find a good buyer, there are a series of financial screenings and other steps that need to be taken to keep the process moving.
• Take the time to work with a financial professional and determine how you want to invest or otherwise use the money you make from the sale of your business.

You've decided to sell your business. Why? That's one of the first questions a potential buyer will ask.

Owners commonly sell their businesses for any of the following reasons:

• Partnership disputes
• Illness or death
• Becoming overworked

Some owners consider selling the business when it is not profitable , but this can make it harder to attract buyers. Consider the business's ability to sell, its readiness, and your timing.

There are many attributes that can make your business appear more attractive, including:

• Increasing profits
• Consistent income figures
• A strong customer base
• A major contract that spans several years

Timing is everything. And that includes the time it takes to get everything ready to sell off your business.

Prepare for the sale as early as possible, preferably a year or two ahead of time. The preparation will help you to improve your financial records, business structure, and customer base to make the business more profitable.

These improvements will also ease the transition for the buyer and keep the business running smoothly. 

Selling a business involves negotiations, discussions, and a lot of leg work. If it's not possible for all this to occur in person, then certainly using services like Zoom or Skype to hold business meetings with potential buyers digitally is possible.

Determine the value of your business to make sure you don't price it too high or too low. You can do this by finding and hiring a business appraiser to get a valuation .

Once you hire an appraiser, they will draw up a detailed explanation of the business's worth. The document will bring credibility to the asking price and can serve as a gauge for your listing price .

You can also determine the overall value of your business using some key metrics. Consider evaluating your company by determining the market capitalization , looking at earnings multipliers, book value, or other metrics.

4. Hiring a Broker

Selling the business yourself allows you to save money and avoid paying a broker's commission . It's also the best route when the sale is to a trusted family member or current employee.

In other circumstances, a broker can help free up time for you to keep the business up and running, or keep the sale quiet and get the highest price. That's because the broker will want to maximize their commission. Discuss expectations and advertisements with the broker and maintain constant communication.  

Even if you decide to sell your business to a close family member or employee, rushing through the sales process is not advised. However, if a relatively quick turnaround is needed, hire a business broker to speed up the proceedings.

Gather your financial statements and tax returns dating back three to four years and review them with an accountant. In addition, develop a list of equipment that's being sold with the business. Create a list of contacts related to sales transactions and supplies, and dig up any relevant paperwork such as your current lease. Make copies of these documents to distribute to financially qualified potential buyers.

Your information packet should also provide a summary describing how the business is conducted and/or an up-to-date operating manual. You'll also want to make sure the business is presentable. Any areas of the business or equipment that are broken or run down should be fixed or replaced prior to the sale. 

A business sale may take anywhere from a few months to years. This includes the time you take to prepare all the way to the end of the sale, according to SCORE, a nonprofit association for entrepreneurs and partners of the Small Business Administration (SBA) .

Finding the right buyer can be a challenge. Try not to limit your advertising, and you'll attract more potential buyers. Once you have prospective buyers, here's how to keep the process moving along:

• Get two to three potential buyers just in case the initial deal falters.
• Stay in contact with potential buyers.
• Find out whether the potential buyer pre-qualifies for financing before giving out information about your business.
• If you plan to finance the sale, work out the details with an accountant or lawyer so you can reach an agreement with the buyer.
• Allow some room to negotiate, but stand firm on a price that is reasonable and considers the company's future worth.
• Put any agreements in writing. The potential buyers should sign a nondisclosure/ confidentiality agreement to protect your information.
• Try to get the signed purchase agreement into escrow .

You may encounter the following documents after the sale:

• The bill of sale , which transfers the business assets to the buyer
• An assignment of a lease
• A security agreement , which has a seller retain a lien on the business

In addition, the buyer may have you sign a non-compete agreement, in which you would agree to not start a new, competing business and woo away customers.

A business broker often charges an average of 10% for businesses under $1 million; while that may seem steep, the broker may also be able to negotiate a deal that is better for you than the one you would have arranged by yourself.

Now that you've sold off your business, it's time to figure out what to do with the profit that you've made. The first instinct may be to go on a spending spree, but that probably isn't the most wise decision.

Here are a few things you may want to consider:

• Take some time—at least a few months—before spending the profits from the sale.
• Create a plan outlining your financial goals, and learn about any tax consequences associated with the sudden wealth.
• Speak with a financial professional to determine how you want to invest the money and focus on long-term benefits, such as getting out of debt and saving for retirement .

You'll need to work in conjunction with your franchiser, as they will need to determine if the new buyer is appropriate. Plus, that new buyer will need to sign a franchise agreement with the franchiser.

There are a variety of fees and rules associated with owning or selling a franchise that can be found in the FTC's compliance guide .  

It's possible to approach a company with a business idea, but first, you need to do your research, prepare a presentation, and research and approach potential targets. While some business plans are best protected with a patent, others can be secured by getting a potential company you want to work with to agree to a non-disclosure agreement.

While many people would like to avoid the 10% a business broker may charge, the risks of selling on your own may outweigh the loss of money. But if you're going to go it alone, prioritize selling to a buyer you know, make use of the advice of experienced, retired owners and executives, and use all the internet resources available, such as the Small Business Administration, or the National Federation of Independent Business (NFIB) .

Selling your share of a business to your partner(s) is a common ownership transfer method, particularly for small businesses. Having an agreement in place with your partners ahead of the sale will help smooth the transition, increasing the likelihood that both the staying and exiting partners benefit.

If you go through a business broker and your business is under $1 million, the broker's commission is likely 10% to 12%. Other fees that can crop up include attorney fees, marketing fees, and the costs of making any cosmetic or more substantial upgrades to your business so as to make it more sellable. There are also fees that may come up if you are transferring a lease to the new owner of your business.

Selling a business is time-consuming and for many people, it's an emotional venture. A good reason to sell or the existence of a hot market can ease the burden, as can the help of professionals.

It may also be possible to receive free counseling from organizations such as SCORE, and your local chamber of commerce may offer relevant seminars and workshops. When all is said and done, the large sum of money in your bank account and your newfound free time will make the grueling process seem worthwhile.

Small Business Chronicle. " How to Calculate the Selling Price For a Business ."

Inc. " What You Should Know About Working With Business Brokers ."

Score. " Selling Your Business ."

U.S. Small Business Administration. " Close or Sell Your Business ."

Federal Trade Commission. " Franchise Rule Compliance Guide ," Pages i, 24-119.

International Franchise Association. " Royalty Fee Requirement Definitions ," Page 1.

Small Business Chronicle. " How to Sell Ownership in a Partnership ."

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How to Sell Your Business

9 min. read

Updated January 4, 2024

Selling a business is as complex as starting one . If you want to do it right and maximize the value of your business, you must take specific steps. 

This article will cover what to do before, during, and after the sale to ensure you’re legally covered and have a plan to exit gracefully.

*Disclaimer: All content in this guide is intended to be general information, and nothing constitutes legal advice. 

1. Know why you’re selling

Understanding your motivation for selling not only shapes your approach but can significantly influence the outcome of the sale. Potential buyers will likely ask why you’re selling, and you need a good answer. 

It usually comes down to one (or a few) of the following reasons:

• Retirement: Often planned well in advance, retiring business owners are typically concerned with ensuring continuity and may still have some involvement in the business.
• Burnout: Sometimes, you simply hit a wall as a business owner and want an exit.
• Market conditions: It’s a good time to sell a home when market demand increases. The same can be said for businesses. 
• Financial need: Facing a cash crunch? Before jumping to sell, explore other avenues like business loans or investors . Selling under pressure might not provide the best deal.
• Strategic move: It’s not always about selling to leave your business, sometimes it’s about pursuing growth. The right buyer can bring specific resources and expertise to take your business to the next level.
• Personal reasons: A desire for a more stable work-life balance, a death in the family, changing career preferences, etc., are all perfectly understandable reasons to explore a sale.

Dig deeper: How to know when to close your business and start over

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• 2. Compile financial statements and tax returns

Organized and strong financials will pull a lot of weight in convincing prospective buyers of the value of your business. Your financials tell the story of your business and provide a glimpse into profitability and potential. It’s not all that different from pitching to investors when pursuing funding.

When preparing to sell, your financials will be under the greatest scrutiny. You’ll likely need to provide at least the last 3-5 years of data. To ensure everything is correct, consult a licensed accountant or financial advisor to review your financials and tax returns. The last thing you want to do is have gaps in reporting.

Additionally, you’ll want to summarize your business model and operations . Combined with your financials, it provides a full picture of how your business runs and generates revenue.  

If you’ve written a business plan , you have already addressed this information and may just require a small update. If you haven’t, use the one-page business plan format to quickly create a brief summary.

• 3. Get a business valuation

A professional valuation is the process of determining the economic value of a business. You can do this yourself , but it will be easier and more credible if you hire a professional appraiser. 

An appraiser will evaluate: 

• Financial statements
• Tangible and intangible assets (i.e. intellectual property )
• The strength and diversity of your customer base
• Efficiency of operations
• The management team’s capabilities

They will also factor in external market conditions and industry trends to finalize the estimated value of your business. This number or range can be used to set the sale price for your business

Dig deeper:

Rule of thumb business valuation explained

This valuation method leverages common sense and experience to provide you with an approximation of your business value. It can be a great option to use before hiring a professional.

How to increase the value of your business before selling

If you’re worried that your business isn’t as valuable as it could be, focus on improving cash flow, expanding your reach, and strengthening relationships.

• 4. Hire a broker

Hiring a business broker or investment bank can significantly streamline the sale of your business. They will guide you through the complexities of the sales process, handle paperwork, and ultimately help you land the best deal for buyers and sellers. 

Here are the services a broker should provide:

• Market analysis: Assess the value of your business in the current market.
• Marketing: Promote your business to potential buyers through various channels.
• Screen buyers: Conduct due diligence to ensure potential buyers are serious and financially capable.
• Aid in negotiations: Represent your interests to get the best deal.
• Paperwork: Manage the extensive documentation involved in selling a business.
• Close the sale: Facilitate the final steps to ensure a smooth transition.

While hiring a good broker isn’t necessarily cheap, it will save you time, help you avoid mistakes, and ensure the transaction goes smoothly. If you’re transitioning ownership to a family member, employee, or other trusted party, you could do this yourself. However, you must involve a lawyer to confirm that everything is done correctly and is legally binding.

Tip: When hiring a broker, be wary of those who demand large upfront fees, make over-optimistic valuations of your business, or lack references from previous sales.

• 5. Find a buyer

Ideally, your broker will promote your business and seek out buyers for you. However, even with this support, identifying the right buyer and finalizing a sale can still take months or even years. 

To keep the process moving and ensure you don’t waste your time, here are a few best practices to follow:

• Leverage your network: Sometimes, the best leads come from within your existing professional network. Talk to industry peers, suppliers, and even competitors.
• Use multiple channels: Don’t rely on one promotional method. Use business-for-sale websites, industry publications, and social media to cast a wider net.
• Prepare an information packet: Create a concise, detailed document about your business. This should include financial summaries, operational details, and growth potential. Again, the one-page business plan is a great option.
• Pre-qualify buyers: Before initiating discussions, ensure potential buyers are actually able to make the purchase. This will save you time and protect any sensitive information.
• Stay engaged: Even if you use a broker, stay involved. Your insights and passion for the business are often a selling point.
• Consider seller financing: Offering to finance a portion of the sale can widen your pool of potential buyers. You just need to ensure you’re comfortable with the terms and risks.

Ideally, you’ll end up with multiple interested buyers. This will give you greater leverage and more options if a deal falls through. 

Dig deeper: How to position your business to be acquired

• 6. Finalize a sales agreement

Speaking of deals, once you have reached a potential agreement, it’s time to get all the documents and legal details in order.

You should work with a lawyer at this stage to safeguard your interests and ensure a smooth transition to the new owner. Here’s an overview of the essentials they’ll help you assemble:

Documentation

• Letter of intent (LOI): A preliminary document outlining the basic terms and conditions of the sale. It’s not legally binding but sets the stage for the formal agreement.
• Purchase agreement: The primary legal document detailing the terms and conditions of the sale. It includes the price, assets being sold, liabilities being assumed, and any contingencies.
• Bill of sale: This confirms the transfer of ownership and itemizes the assets included in the sale.
• Non-compete agreement: Buyers often want assurance that the seller won’t start a similar business within a specific time frame and geographic area.
• Employee and supplier agreements: New contracts or agreements may need to be drafted if the buyer retains current employees or suppliers.

Legal considerations

• Due diligence: The buyer will conduct a thorough investigation of your business’s financial records, contracts, assets, and other critical documents to validate the purchase.
• Liabilities: Clearly define which liabilities the buyer will assume and which remain with the seller.
• Warranties and representations: These are statements made by the seller about the current state and history of the business. Any breach can lead to legal consequences.
• Indemnification provisions: These protect the buyer from future liabilities arising from the business’s past activities.

The sales process

• Escrow: To ensure both parties fulfill their obligations, funds are often placed in escrow until all conditions are met.
• Financing: The seller may need to provide documentation or cooperate with the buyer’s lender.
• Transition period: The seller may remain involved for a specified period and help with training, introductions to key clients, or operational guidance.
• Closing: This is the final step where all documents are signed, funds are transferred, and ownership is officially changed.
• Post-sale notifications: All stakeholders, including employees, clients, suppliers, and relevant government entities, are notified of the change in ownership.

7. Plan how you’ll manage funds from the sale

Successfully selling your business isn’t the end. You now need to plan how to manage any profits from the sale. 

You may want to start another business , support charitable causes, or enjoy the fruits of your labor. Planning ahead can reduce tax liabilities and ensure the money serves your long-term goals. 

While we can’t account for everything, here are some of the most common financial considerations to plan for post-sale.

• Capital gains tax: The sale will likely result in capital gains, which are taxed differently than regular income. 
• Installment sales: If you receive payments over time, you might be eligible for installment sale treatment, spreading the tax liability over several years.
• State taxes: There may be state-specific sales tax depending on where your business is located.
• Debt repayment: A portion of the proceeds may need to clear any outstanding debts.

Don’t rush any decisions about how you’ll use your newfound wealth. Take the time to consider all options and speak with financial and tax advisors to discuss your goals, investment options, and the pros and cons of specific decisions.

Additional options to exit your business

Selling a business is a common exit strategy—but it’s not the only option.

There are strategic benefits to combining with another business. The key is to find a partner whose business objectives and culture align with yours. Once the merger is complete, you can explore stepping back and allowing other leadership to take over.

Transfer ownership 

If you have family members, heirs, or trusted employees interested in the business—consider transferring ownership to them. This eliminates the drawn-out process of finding a buyer and can be especially meaningful for family-owned enterprises.

While not a common option for small business owners, initiating an initial public offering (IPO) can raise capital and potentially provide an exit by gradually selling your stake. 

Liquidation

Liquidating your company assets may be the best option if your business isn’t profitable and you can’t find a buyer. While it’s often a less lucrative exit strategy, you’ll at least recoup something from your business.

• Preparing to sell your business

Deciding to sell your business is a huge milestone in your entrepreneurial career. It’s not something you should do rashly. By taking the time to plan properly—you’ll increase your chances of getting your asking price.

Check out our other business management resources to learn how to grow and prepare your business long before considering a sale:

• Create a business strategy
• Manage during a crisis
• Set business goals

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

Table of Contents

• 1. Know why you’re selling
• 7. Plan how you'll manage funds
• Other options for exiting

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How to Sell a Business: The Ultimate Guide (2024)

• 3 years ago

Are you considering selling a business, but need help figuring out the process? This definitive guide to selling a business will demystify the process. Keep reading to get the most value for your business.

Every business owner will eventually decide it is time to develop an exit strategy.

Whether you are selling a business to start a new one, retiring, or just passing it on to your kids, our guide will give you the steps to prepare for a sale including:

• Define the exit strategy
• Prepare financial statements
• Get an independent business valuation
• Increase the business value of your small business
• Market to potential buyers
• Negotiate terms and sell your business
• Transition period

There will be a ton of information in this guide, so make sure to download our Selling a Business Checklist to help you in the process. Keep reading for information on how to sell your business.

Step 1: Define the Exit Strategy

The first step in selling your business is defining your exit strategy. There are a variety of exit strategies that a business owner can use to sell a small business.

Which strategy is right for you will depend on a variety of factors. The most important considerations are:

• Type of business
• Business structure
• Working with a broker vs. without a broker
• Who will take control of the business after I sell my business?

After reading this section, you should know what is the best way to sell your small business.

Type of Business

Selling your small business is going to vary based on the industry the business is in. For instance, many locations have specific requirements for certain industries that may limit the prospective buyers available.

I’m sure you already know the regulations for your area, but if you need to refresh yourself on any limiting restrictions for your location and industry, the Small Business Administration is a good place to start.

This information will help when you start to market to prospective buyers.

Franchises may have special requirements that owners must go through to sell their franchise. Talk to your franchisor for more information on making a deal to sell a franchise.

Business Structure

• Sole Proprietorship
• Partnership
• Corporation
• Comparison of business structures (need to remake chart)

Depending on how the business is structured, selling it will follow a different process. An LLC and Corporation are the easiest to transfer ownership as they are intended to be separate entities from the business owners, while a sole proprietorship is the hardest to transfer ownership as it is meant to have a single owner and the income and liabilities are tied to the person.

When you think about how to sell a small business that is a sole proprietorship remember you will be selling the assets, but the new business owner will have to reorganize the business under their name.

Alternatively, you can change it to an LLC before the sale to make the transfer easier. To set up an LLC check out this Small Business Trends article .

Other than those variances, the only real differences are the tax and legal documents, which you can find information on at the IRS website .

Broker Sales or Private Sales

There are two main ways to sell your business, brokers or private sales. Let’s explore each to establish whether your small business will benefit from a broker selling it or whether you should learn how to sell a business privately.

Selling Your Small Business with a Broker

They have been through the process multiple times and are able to help guide you in getting the proper financial statements and due diligence, determining an asking price, finding potential buyers,  finding the right buyer to sell your business to, and closing the deal.

If you want to sell your business with a broker, you’ll need to reach out to one. You can search for “business brokers near me” in Google to find a business broker in your location.

Brokers will normally charge a percentage with a minimum commission that varies based on the revenue of the company being sold.

MidStreet Mergers & Acquisitions has an easy-to-understand blog of how brokers normally charge if you want to understand “how much does it cost to sell a business?”

Given the minimum commission is typically $10-12k, if your business makes less than $100k revenue per year, you will probably want to understand how to sell a business without a broker.

How Do I Sell My Business Without a Broker?

A small business for sale by an owner may result in keeping more of the business valuation once the business is sold, but unless you already have someone in mind it may not be the best way when trying to figure out how to sell a business quickly.

You’ll be responsible for gathering all the company financial statements, determining the asking price, finding potential buyers, answering all their questions, getting the best deal, and finding someone to review the closing documents before selling.

Make sure to consider the time and financial costs that will be incurred when deciding how to sell your business.

If you are trying to improve cash flow, profit, or revenue while looking for prospective new owners, you may find that it is hard work if trying to sell quickly.

If you have time to do it right and make sure to do your due diligence, you can potentially get a higher sales price and keep more of the profit.

Who Will Take Control After Selling Your Business?

There are some specific instances where getting the best value may not require all these steps. Some scenarios that may simplify the process include:

• Employee Buyouts.
• Plan to sell to a related person upon retirement.
• A competitor approaches you about merging the businesses.

These scenarios could limit many of the questions that need to be considered in steps 3, 4, and 6.

In the case of merging two businesses, there are some additional considerations that are discussed in our blog Increasing Business Value through Mergers which will go into far greater detail about how to sell your business to a competitor.

Step 2: Prepare Company Financial Statements

Potential buyers are going to want to see the long-term value of the company as demonstrated through revenue, cash flow, and profit.

This information needs to be readily available because it will impact all the other steps going forward.

You should make sure to include the following documents

• Tax returns for last 7 years (or the start of business)
• Supplier agreements
• Business licenses and insurance documents
• Proof of intellectual property rights/ownership
• Documentation of all debts and liabilities
• Documentation of all assets
• Anything else you think the buyer might want to know

The long-term sales growth, net working capital , and other financial information will help brokers and agents answer buyer financial questions while selling the business for the most money.

Step 3: Get an Independent Business Valuation

Regardless of whether you get a suggested sale price from someone who evaluates businesses, there are several ways of establishing worth you should be familiar with.

Valuations Formulas to Know Before You Sell Your Business

There are multiple ways to value a business for sale which I discuss in the blog How to Buy a Business . The following is a recap of it adjusted for sellers.

When determining how to value a business to sell the following methods can be beneficial to evaluating the value:

• Asset Valuation

Price to Sales Ratio

• Discounted Cash Flow

Asset Valuation Model

An asset Valuation Model is used in businesses that are heavily based on assets. When selling a shopping center, this is a great model. It basically adds up all equipment, inventory, and property then subtracts liabilities and debts.

In the example above, the company would be valued at $1,516,020. This process doesn’t take into consideration revenue or market direction so it might not be the most fair way to value the true worth.

Another way of valuing a business is by the price to sales (P/S) ratio. This takes the revenue of a company and decides how much to value it based on industry standards. Check out NYU Stern’s site for an idea of what multiple to use.

Using this method the P/S ratio ranges from .21 for grocery stores to 14.85 for software companies, with a total market average of 2.64-2.66.

If you compare this process to the asset valuation model, you’ll find that the revenue would only have to be around $570, 000 to justify the same sale price.

Price to Earnings Ratio

To use the price to earnings (P/E) ratio, you use the net income and industry norms. NYU Stern has a similar table for P/E Ratios.

Let’s assume that your company is a retailer, based on the NYU Stern charts, the net income would only have to be between $58,000-67,000 to be worth the same as the previous models.

Discounted Cashflow Method

This one allows you to include a variety of factors that other methods might not. Investopedia wrote an article that will help you get a deeper understanding of this step. You can read it here.

Factors taken into consideration in this method include:

• Sales and growth
• Cost of capital (inflation assumption of 3% plus the interest rate on a loan)
• Income taxes
• Changes in inventory, accounts payable and accounts receivable
• Investment income
• Depreciation

Zions Bank offers a useful calculator for the discounted cash flow method.

It will help you test a variety of different market conditions and is a really good option to help you find how to value a small business.

Make sure to do your due diligence by documenting each scenario you test. This will help you negotiate when selling your business to potential buyers.

Check out our blog about How to Value a Business for more information on valuation methods.

Step 4: Increase Business Value Before Sale

Businesses are valued differently by different people based on what they consider important. There are several things you can do to increase the potential sale price  before approaching potential buyers, including:

• Documenting plan going forward like you aren’t selling
• Improve financial positions and profit margin.
• Pay attention to the market

Let’s dig deeper into why each of these is important.

In the normal process of the workday, it’s common for everyone to have more work than time. If you make the time to get the space where every person who walks in can tell what and where everything is it will take them less time to make a more favorable impression of the business.

It will get you prepared to give buyers the best idea of how to keep the store organized. It will be worth it because you’ll know where everything is and be more prepared to answer questions about any of the topics related to the operations.

Documenting Plan Going Forward Like You Aren’t Selling

This step shows that you have thought about the long-term success of the business and shows that even though you are considering selling, you want to help the buyers succeed.

Given you have the best knowledge about how well the business is doing, what opportunities you haven’t capitalized on, and what you just haven’t gotten around to, it will give both you and the potential buyer a map of what step should be focused on next.

A documented plan may increase the valuation from buyers if they believe it is a good plan. It will also help you with finding ways to improve the valuation to get the best offers from buyers.

Improve Financial Positions and Profit Margins

If you find that the financial position of the company can be viewed in vastly different ways, you may want to investigate how to make the different market valuations more in line with each other.

For instance, if the Price-Sales ratio shows the value is $1.5 million, but the Price-Earnings Ratio shows a valuation of $800,000, buyers are going to consider the best sale price $800,ooo leaving a lot of money on the table.

If you find a way to bring the PE ratio more in-line with the $1.5 million valuation, the sale could be worth an extra $700K.

This would require looking at aspects like unnecessary expenses, reducing (or increasing size of) orders based on what will save more money, paying down debt, having a sale on poor-selling inventory, or any other number of methodologies.

Check out our video on how to improve business efficiency to get ideas.

Pay Attention to the Market

Market conditions can dramatically impact whether buyers are willing to offer you the best deal.

During recessions, buyers will want to take advantage of the opportunity, while during expansionary times, businesses will often see premium valuations to increase the chance of making a deal.

Step 5: Market to Potential Buyers

• Business brokers
• Online business marketplaces, like UpFlip’s marketplace
• Sell to a top employee
• Sell to a competitor
• Newspaper / online ads
• Ask your social network
• Commercial realtors
• Trade associations
• You’re franchisor if you are a franchise.
• Add “Small business for sale near me” in the metadata of posts and images online to trigger results during searches.

The goal here is to make people aware that you are selling your business. The suggestions above basically fall into three categories:

• Sell to someone you know.
• Have a third party help you.
• Use digital platforms to sell the business

Sell to Someone you Know

This is typically the least complicated way as you already have a relationship and can discuss the terms without really having to do any marketing.

The major pitfall with this solution is you might agree to a lower price or even agree to let them pay you off over time. If this is not handled strictly professionally, it could create issues in the relationship.

Have a Third-Party Help You

Third parties will typically have more experience with selling businesses and may be able to create better results faster despite the additional costs that come with hiring a third party.

Business Brokers are ready to help and normally charge a percentage of revenue.  They have more resources to find business owners like existing relationships that may be interested.

Franchisors might also have a list of people looking to purchase franchises that will make finding the new owner easier. If you own a franchise make sure to reach out to them.

Use Digital Platforms

If you are already proficient in using digital platforms for ads, you may find that they can be highly beneficial.

If you haven’t used ads before, then they can be a steep costly learning curve, but most of them have amazing tutorials that will help you figure them out.

Step 6: Negotiate Terms and Sale of Business

To prepare for this stage, I would recommend checking out our blog about 41 questions to ask when buying a business . It will help you be prepared for questions buyers have.

During negotiations with the buyer make sure to discuss the following topics:

• Liabilities
• Period of Time You’ll Stay During transition

We’ve already discussed most of these in previous sections, but the employees and transition period should be discussed more.

The employees of the company can be both an asset and a liability. Depending on your plans for the current employees, you may need to negotiate an agreement on how to handle them.

If you plan on eliminating positions, you may want to have an agreement on how to handle layoffs or severance packages. The balance blog offers a good read on severance packages .

Period of Time to Stay on after Transition

Many business ownership transfers require a period of time where the current owner is still active in the business. This transitional period helps secure the success of the business once the new owner takes over.

Whether it is required by a lender or the purchaser certain aspects should be included:

• Period of time you’ll stay on
• Roles during transition
• Pay during transition

The Period of time you’ll stay on could be as little as a few weeks or multiple years depending on the complexity of the business. It should be specified in writing how long the transitional period will be.

During the transition, there should be a plan for the roles to gradually be performed by the new owner.

When my dad was hired as the CEO of a company, he explained to me that for the first 3 months he was just observing and learning how they do things. Then he gradually started implementing new processes.

I think that is a pretty good philosophy to take during a transition.

The American Institute of Architects gives some good advice on mistakes to avoid during transition planning. I’d take a read through it real quick to help minimize transition issues.

Pay during the transition should also be discussed and documented. This should be based on the time and amount of work done. It will typically be comparable to management or employee pay.

Make sure to negotiate the pay at a level where the new owner can still make a profit otherwise it could jeopardize the health of the business.

If the buyer is using financing to buy the business, they may want to include this in the purchase price so they can secure financing for it.

Once you and the buyer are in agreement on the terms, it’s time to contact a lawyer to draft the agreement before the sale is completed.

Once the contract is drafted and signed, the buyer is now the new owner and you have more money to pursue other passions.

There may be one more step that is required. Which we’ll discuss next.

Step 7: Transition Period

Some loans require this to help protect the investment. If it’s part of the terms required, make the best of the time. It might even be fun.

As discussed above, you’ll probably be working like normal for a period of around three months, then gradually reduce your responsibilities and time working. Typically this transition will be less than a year.

Now you know how to sell your company. We covered the following steps:

I personally find Shark Tank and The Profit really beneficial to better understand how investors evaluate businesses. If you don’t already watch them,

I’d recommend them to gain more business awareness.

I hope this article helps you sell your business for the most value. If you need some help, reach out to UpFlip and we’ll help you sell it.

Brandon Boushy

Brandon Boushy lives to improve people’s lives by helping them become successful entrepreneurs. His journey started nearly 30 years ago. He consistently excelled at everything he did, but preferred to make the rules rather than follow him. His exploration of self and knowledge has helped him to get an engineering degree, MBA, and countless certifications. When freelancing and rideshare came onto the scene, he recognized the opportunity to play by his own rules. Since 2017, he has helped businesses across all industries achieve more with his research, writing, and marketing strategies. Since 2021, he has been the Lead Writer for UpFlip where he has published over 170 articles on small business success.

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2 thoughts on “How to Sell a Business: The Ultimate Guide (2024)”

Thank you for this article! I’ve opened up a small online business last year to help with expenses. Unfortunately, I have to close it down as I underestimate the time and effort required to build one while keeping up with my day job. Anyway, hopefully, you can also make an article on how to negotiate to be a co-owner/investor when selling your business. Thanks again 🙂

Thank you for the comment. I’ll add that to the list of ideas

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Table of Contents

Selling a Business: A Step By Step Guide

Reviewed by

February 23, 2021

This article is Tax Professional approved

When considering selling a business, it’s time to get the compensation you deserve for all of the blood, sweat, and tears.

By understanding all the moving parts behind a business sale, you can worry less about the process and focus more on the outcome: getting a fair price for all your hard work.

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How to sell a business, step by step

While every entrepreneur’s journey is different, these are the steps you can typically expect to take when selling a business.

Step 1: Determine your commitments

While preparing to sell a business, it shouldn’t suffer. Selling a business takes time and energy. Getting too caught up in the process can get in the way of servicing your customer base.

Chart out an exit strategy to prepare for the sales process well in advance. For example, have a plan in place for any outstanding invoices and get the financial records up to date for prospective buyers.

You don’t need to know the exact amount of time needed to take care of every task, but it will help you come up with a timeframe for a successful sale. It will also help you plan what kind of professionals you need to hire.

Step 2: Hire professionals

Knowing how to sell a business is important, but equally important is knowing where to bring in help.

To jump to our overview of professionals to hire, click here . But as a quick rule of thumb, start with an accountant and attorney. Outside of that, it’s up to you to determine how much help you need from appraisers, brokers, or consultants.

Once you’ve found and contacted them, any of these professionals should be willing to sit down with you for a free consultation. Here are some useful questions to ask an appraiser , a broker , and a consultant .

Step 3: Make improvements to the business

Before selling a business, invest in improving its profitability and the efficiency of its day to day operations. This will help you get the biggest sale price possible by boosting the value of your business. The changes you make will depend on the type of business, but here are some ideas to get you started.

Put on a fresh coat of paint

If you have a brick and mortar location, simple updates—new fixtures and furniture, or even a (literal) fresh coat of paint—can help the business look more desirable to potential buyers.

Smooth out the operations

The business operating system (BOS) is the rulebook for how the company runs and how employees work together to achieve goals. A BOS that’s disorganized or poorly implemented doesn’t look good, and hurts the profitability of the business. Replace it with a new system, or revise the current one to make it more efficient.

Sell, sell, sell

Focusing on boosting sales before selling a business will make it look more attractive to buyers. This is especially the case with individual buyers—as opposed to organizations—who may be looking to benefit from the immediate cash flow that comes with buying a high-revenue business.

Diversify the client list

If more than 20% of your business consists of a single client, you could be at risk of giving buyers cold feet. After all, if that client decides they don’t like the new owner and decides to churn, it will put a huge dent in the profitability of the business. Leading up to a sale, try to take on new clients and diversify your portfolio, so this is less of a risk.

Step 4: Organize your financials

When it comes to financials, prospective buyers want as much transparency as possible. You’ll need at least three years of clean financial statements (balance sheet, income statements) to present to prospective buyers. Make sure that all income is accounted for.

You should also make sure you have a bookkeeping solution in place, so you can guarantee the new owner ongoing, up-to-date financial info.

Finally, if you have any assets on your business books that you’d like to keep for private use—such as vehicles or equipment—be sure to transfer them off the books. These assets need to be legally transferred into your possession, so they’re not falsely recorded as belonging to the business you’re selling.

Step 5: Set the sale price

Does your business rely on proprietary information or specialized knowledge? If so, you’ll get the most realistic business valuation from an appraiser or broker.

If you’re determining your own asking price, you should generally plan to set it at one to four times the seller’s discretionary earnings (SDE).

The SDE consists of:

• Your business’ annual net income before taxes
• Money your business makes from investments
• Depreciation and amortization of business assets
• Your personal compensation and benefits
• Non-recurring expenses.

The number by which you multiply the SDE—one to four—is determined by the current state of the market, your business’s competitiveness, and other factors. These are hard to pin down, but a qualified business consultant can help you figure out the SDE multiplier when selling a business.

Step 6: Get your paperwork in order

Besides financial records, you need certain legal documents to be prepared before you make a sale. The most important is the asset purchase agreement —a legal contract for selling your business’s physical and intellectual property.

This document typically runs 25–50 pages in length, and draws on your financial records. Often, the asset purchase agreement will also list your obligations as former owner. Most commonly this means staying on with the business for a set period, to consult with the new owner.

A non-compete may also be required. This would state that you do not intend to start a new business that would be competition to the old one you just sold.

Preparing one of these documents is a time-consuming task, which is why it’s important to hire an attorney who can handle it for you.

Step 7: Prepare a selling memo

The selling memo is an integral document when selling a business.

You provide the selling memo to prospective buyers, giving them all the information they need about the business so they can consider making a serious offer.

Your selling memo will include:

• An overall description of the business
• Information on the location
• The business’s strengths
• An overview of the competitors
• A description of the products/services
• Information on the day-to-day operations
• The marketing plan
• Key employees and managers
• Growth projections
• Potential buyer concerns
• Financial information
• The asking price and terms of sale

Check out ExitAdviser for a comprehensive rundown of the selling memo , and online tools to help you put one together.

If you hire a broker, they will prepare the selling memo for you.

Step 8: Put the business on the market

One major challenge you face when advertising a business for sale is maintaining confidentiality. If clients or employees find out you’re planning to sell, they may get skittish. And competitors could interpret the decision as a sign of weakness, and take advantage of it.

That’s why it’s usually wise to hire a broker. Not only will they have a large network to draw on, they’ll know how to discreetly approach potential qualified buyers.

However, in the event you do decide to sell a business without help from a broker, online services have made doing so easier than it once was.

BizBuySell.com tags itself as the biggest business for sale marketplace in the world, and will even help you find a broker if you change your mind about going it on your own.

Step 9: Negotiate the sale

When the right buyer is ready to purchase the business, they’ll submit a letter of intent to purchase . This document is non-binding; either you or the buyer can back out at any time.

It’s rare for a buyer to back out, though. By this point, they’ve already invested significant time in researching the business and putting together an offer.

Now, you may either accept the offer, or enter into negotiations with the potential buyer. Negotiating the sale of the business is its own special art form, and you may want to draw on advice from a business consultant during the process.

Step 10: Finalize the sale

Once you accept a letter of intent, you should expect to wait while the buyer performs due diligence. They’ll take a set period of time, from two to four months, to do this.

For the sake of due diligence, they’ll examine your business’ assets and liabilities, financial history, inventory, staff structure—just about anything that affects the day-to-day running of your business.

Due diligence is your buyer’s chance to get an in-depth look at your business, and make any necessary last minute moves—borrowing extra cash, or looking for additional staff—before officially taking over.

The sale of your business is completed when you and the buyer sign the asset purchase agreement prepared by your attorney, and any other supporting documentation that may be required depending on the specifics of your business.

The professionals you need to hire

A guide on how to sell a business can give you the steps you need to take, but professionals can ensure you’re getting the maximum value and cover you legally. That’s why it’s best to get a little help from your friends—“your friends,” in this case, being paid professionals.

At minimum, you’ll need to work with an attorney and an accountant.

An attorney can help you prepare the legal documentation for the transfer of assets, and make sure nothing you’re doing is likely to get you sued.

An accountant prepares the financial records you need to prove to prospective buyers your business is worth investing in.

Then, you should consider hiring an appraiser . For a fee— typically $3,000 to $7,500 for small businesses—an appraiser will tell you how much your business is worth so you’re getting the maximum value.

An appraiser will survey:

• How much money your business owes
• How much others owe your business
• Your business’s inventory, and other assets
• Past tax returns
• Your receivables and sales

Then, they’ll take into account the condition of the market, and your business’s place in it, to determine an asking price that will be attractive to buyers while also getting you the best price.

However, you won’t need to hire an appraiser if you hire a business broker . A broker will both appraise your business, and put it on the market for interested buyers. Typically, they’ll charge 5–10% of the commission price. Brokers find business buyers for you by preparing a prospectus for it, listing it on marketplaces, and tapping into a large professional network.

Finally, before putting up the “For Sale” sign, consider hiring a business consultant . Someone with experience in your industry can tell you ways to improve your business before making a sale so it will look more attractive to potential buyers.

Who to sell a business to

Equally important as how to sell a business is who you’re going to sell it to.

You can sell a business to a variety of individuals or entities. There are pros and cons to dealing with each.

Selling a business to an individual on the market

This is like selling your house on the market. You put it out there, and see which individual shows the most interest in becoming a small business owner (for the highest price).

Pros: Since the business is up for sale on the open market, you have the highest chance of finding someone willing to meet the conditions of the sale—for instance, an all-cash closing.

Cons: To sell on the open market, you will likely need to hire a broker who charges commission.

Selling a business to a family member

Roughly one-third of business sales are between family members. This can take the form of handing off the business to the next generation of owners.

Pros: As the business gradually changes hands and your family member takes over, you’ll still have some say in how the business is run. Also, a change of hands between family members means a smoother transition for staff and clients.

Cons: It’s unlikely you’ll be able to get the highest possible asking price for the business when selling to a family member.

Selling a business to partners

If the business operates as a partnership, you have the option of selling your shares to your partner. Most likely, when you formed a partnership, you signed a buy-sell agreement. This document outlines the price and procedure you need to follow to make the sale.

Pros: Following a predefined path for making the sale requires minimum effort on your part, and has a low impact on staff and clients.

Cons: Even as the buy-sell agreement makes for a quick change of hands, you may find yourself stuck with a price that seemed attractive when you signed the contract, but has become less appealing as the business has increased in value.

Selling a business to an employee

A trusted employee who’s great at their job and knows the business inside and out could make the perfect business owner—and the ideal buyer.

Pros: You can plan the sale well in advance. The first step is setting up a legally-binding partnership with an employee. Then, you’ve got plenty of time to arrange the hand-off, and extract yourself from daily operations, before the employee takes over completely.

Cons: As with selling to a family member, selling to an employee is unlikely to get you top dollar for the business.

Selling a business to multiple employees

You may be able to sell the business to qualified employees, if you have an Employee Stock Ownership Agreement (ESOP) in place.

Pros: Taking advantage of existing relationships with employees means you don’t need to put the business on the market. Existing employees are also more likely to run it successfully than a buyer you’ve never met before.

Cons: The ESOP needs to be put in place well before you make the sale. Setting it up demands extra paperwork and professional help .

Selling a business to another business

Large businesses and private equity groups buy companies as investments. In that case, they’re not looking to set it up with a new owner, but to use parts of the business—market share, competitiveness, profitability—to benefit a larger, similar business in their portfolio.

Pros: You’re more likely to secure a better selling price from another business than from individuals, and get an instant payout.

Cons: Depending on the sale terms, you may need to continue managing the business for a fixed period during the transition.

Further reading

• How to Find an Accountant
• Accounting Outsourcing: How to Hand off Your Financial Tasks (With Recommendations)
• How to Know If Your Small Business Is Financially Healthy
• How Long to Keep Business Tax Records and Receipts

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How to sell a business in six steps

Wondering how to sell your business so you can make the most of your labor of love? First off, congratulations! Selling the business that you worked so hard to create and build is a big choice, and one that comes with planning, goal setting, searching (for buyers, and maybe even some soul-searching, too), valuations, and a whole lot more. So before you start advertising your business in the local classifieds, start here: how to sell your business— the right way. To help guide you, we’ve made a list of six simple steps that you can follow all the way to the bank. 🏦 How to sell a business in six steps:

• Time your sale properly
• Organize and prepare your finances
• Determine the value of your business
• Decided whether or not to use a broker
• Find a buyer

Ready to move from for sale to sold? Well, getting there will take longer than reading a few bullet points, but you’ve got to start somewhere! Let’s begin.

Step 1: Deciding to sell your business

Deciding to sell your business isn’t always an easy choice to make. It’s typically not a quick one, either. When you’ve reached this point, it usually means you’re in the midst of change, and that’s totally okay. Here are just a few reasons why people make the decision to put the proverbial “for sale” sign on their business:

• A career or a life change. For example, a divorce, a death in the family, illness, or, in terms of your professional life, you’ve decided that you’re ready for your next move and a total career change. This could be anything making the switch from running a boutique graphic design agency to opening a bakery or moving from owning a catering company to becoming a full-time accountant. You do you—and sell your business to help you get there.
• Retirement. You’ve put in your time and have decided to call it quits and join the flock of snowbirds who travel south six months of the year. We wouldn’t blame you. ✈️
• Differences: Perhaps after five years in business together, you and your partner have decided that you want different things, and selling the business is the best way to achieve your respective goals. Don’t stress, this happens. And when it does, it’s best to have the agreements made up in advance of the sale.
• It’s just not working for you: You feel overworked, underpaid, or simply bored. When this happens, you’ve got a call to make: should you stay or sell?

Whatever the case, it’s important to know the reason behind your decision. Not only will it help you sleep better at night, but potential buyers will want to know. Knowing the owner’s motivation can be a big part in their own decision making, helping them understand the reasoning behind the sale and how that might play a part in the future success of the business. When selling, remember to be open and transparent. This creates trust and a smoother process from start to finish.

Step 2: Time your sale properly

Making the decision to sell your business usually doesn’t happen overnight. But even if you magically woke up with the idea and decided to move it from dream to reality, the plan to get you there can take months—sometimes even years. This is why planning well in advance is key to making the most out of your business decision. Allowing for ample space and time in the process gives you the opportunity to make improvements that will increase the business’s valuation. For instance, you might want to clean up your finances , look at ways for reducing operational costs, and create a few campaigns to build up your sales. Or, if applicable, focusing on customer retention by launching a loyalty program, or executing a few tactics that will strengthen your brand awareness. While these tips do take time to go from ideation to implementation, they can make your business much more attractive to buyers. 

Step 3: Organize and prepare your finances

We just mentioned cleaning up your finances, but before you can do that, you’ve got to bring them all together in one organized place. Start with financial statements like balance sheets, P&L statements , and your tax returns from the past three to four years. If you’ve got the time, take the extra step to review them all with an accountant or Wave Advisor to make sure everything is in good order. You’ll also want to go into list-making mode to put together the following information:

• Equipment: What’s being sold with the business? 
• Contacts: Who are your suppliers? What are their related transactions? Anything outstanding? 
• Lease: How long is your current lease? What utilities are included? Are there options to renew? ‍

All of this information can go into an information packet for your potential buyer. This packet will provide an overview of your business, how it’s managed, and the day-to-day operations. It’s helpful for the buyer to have, so they can take over operations as seamlessly as possible.

Step 4: Valuate your business

How much is your business worth? That’s the question you want to find out as you prep for sale so you have a realistic listing price in mind. Emphasis on realistic. Don’t price the business too high or too low. When you do that, you’ll be stuck with less money than you deserve, or you’ll find that buyers are passing on the opportunity because the cost is too much. To help you get the right answer, look at hiring an appraiser to complete the valuation. As a third party, they’re neutral to the situation and have nothing to gain from the sale. Plus, they can draw up the necessary documentation that you’ll need throughout the process. Now, let’s take a step back to step two: timing your sale properly. When valuing your business, you need to give yourself enough time to get all your ducks in a row, which includes the time to boost your valuation. This can be done through cost-cutting tactics and initiatives to increase revenue, brand awareness, and customer retention. You know, all the things that a buyer wants to see before they sign the dotted line. 🖊

Step 5: Consider using a broker

When you’re selling your business, there are two ways you can go: with a broker or without one. If you’re selling to a close friend or relative, a broker might not be needed. If you decide that’s the case, you can save yourself a few bucks. But speaking of dollars, you might want to explore hiring a broker if you want the biggest bang for your buck. Brokers work off commission, so they’ll do what they can to help maximize the sale and their take-home amount. To help with the sale, they can handle the logistics of selling your business, freeing up your time so you can keep the business in good order until it's sold. For example, they might be working quietly in the background with their network of buyers to get the highest price. But before you decide to hire your broker, be sure to set your expectations, including advertisements, communication, and commission. This makes for a successful and transparent relationship, and a smoother sale.

Step 6: Find a buyer

Last but not least, you’ve got to find yourself a buyer. And you guessed it: this (likely) doesn’t happen overnight. To get you to that ideal point of having two to three potential buyers, consider boosting your advertising. This is where brokers can come in handy. Not only do they have their networks, but they’ve also got a few marketing strategies up their sleeves to help promote the sale of your business to those who are looking. Once you’ve found the buyer(s), keep in touch with them. You’ll also want to make sure they’re pre-qualified for financing before you give out any specific info about your business. Next, you’ll want to bring in your lawyer. Lawyers are extra helpful if you plan to finance the sale and need to work out the details with the buyer. On that note, make sure any agreements are put into writing, and have potential buyers sign a nondisclosure or confidentiality agreement so your business remains yours—at least until it’s theirs. Now, when it comes to price, allow yourself some wiggle room. Set a firm price or price range that you find reasonable. This lets you allow for negotiation, but on your terms. ‍ Lastly, the signed agreement. Try to get this into escrow , which means that a portion of the purchase price would be held by a third party until agreed-upon obligations are filled. These could be the transfer of assets or a resolution for any outstanding assets, as an example. ‍ After all is sold and done, you might find yourself with a few more business encounters, like a bill of sale that transfers your business assets to the lucky buyer; an assignment of lease; or a security agreement which lets you keep a lien on the business. Another legality? Your buyer might present you with a non-compete. By signing this, you’re agreeing that you won’t start a competing business that could lure your loyal customers away.

Selling a business FAQs

How much does it cost to sell a business .

This depends on the route you take. If you go with a broker and you sell your business for less than $1 million, expect to pay a commission around 10% to 12%. You’ll also have to pay fees associated with marketing, lawyers, potential transfer fees, and any improvements you make to your business to boost its appeal. 

How do you sell your share of a business?

The common way to sell your share of a business starts with an agreement. Try to put this in place with your business partner(s) ahead of any sale. This will help remove emotions and keep things running smoothly.

How do you sell a small business without a broker?

You don’t always need a broker to help sell your business. This can be especially true if you’re selling to someone you know, like a family member or friend. That said, you should still consult with your small business network to get their expertise and advice; trusted sources on the internet ( 👋 ); and those who’ve have sold businesses before.

The bottom line on selling your business

Selling your business comes down to six simple steps: the timing of your sale, organizing your finances, valuation, the choice to use a broker or not, and then finding a buyer. And even once all that’s complete, sometimes you need some help. Be sure to talk to your network of business owners or reach out to Wave Advisors for help. This is a big move, so you want to make sure that it’s the right one for you, and done right. Which, in the case of selling businesses, doesn’t always mean quick. But trust us: seeing that deposit enter your bank account will make all the hard work worth it.

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The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.

How to Sell a Business Plan

by Jim Hagerty

Published on 26 Sep 2017

Selling a business plan can be a very profitable venture; however, the plan you market must be strong and structured professionally. Whether you are selling a franchise or a simple business plan, it must contain proven success methods and direct reports. It must also be marketed to the correct prospects.

Strong business plan

Legal and financial counsel

Write a strong plan. Your business plan must be marketable. This means the overall plan must contain proven methods of success. It is, therefore, wise to work closely with an attorney, CPA or marketing firm. These professionals can help you structure your plan so it's relevant to a variety of readers. It should include clear rhetoric and reports, void of confusing industry jargon.

Identify your market. Research your market to determine if there are people looking for an opportunity your business plan will provide. Chances are there are many people in your market with the dream of starting their own business but lack the proper plan. Start with your immediate market first. Compile data and keep a database of prospects. Talk to as many people as possible.

Buy classified ads. Most newspapers have “Business Opportunities” sections in their classified advertising sections. Before buying space, examine the paper’s circulation numbers and demographics. This will ultimately determine which types of people and how many of them will see your ad.

Utilize trade publications. Most industries have their own publications. The investment industry distributes publications to its brokers and customers. There are many automotive-related periodicals. Hunting and fishing publications are also ample. These magazines, newspapers and newsletters all sell display and classified advertising space. They are great outlets in that their readers all have similar, specialized interests. Aside from purchasing ad space, submitting guest columns or stories about your services is often possible. Contacting editors is often all it takes.

Build an expert website. Websites are a great way to sell products and services. For a professional with expert advice and products, the Internet is a wonderful stage to pitch your business plan to millions of prospects. Linking to other sites and selling your products directly on your page is also a powerful way to sell your plan to multiple customers (see Resources).

Use online commerce sites. Websites like Craig's List, Facebook and eBay often serve as effective and specialized forums to sell merchandise (see Resources). Some sites are free, while others charge a fee. Many trade periodicals also have online versions of their publications. Use the free sites first.

Join professional groups. Most industries have clubs and associations made up of professionals in their field. Join an association in your targeted industry. Ask to pitch your business plan as a guest speaker at a regular meeting or networking event. Attending industry conventions and trade shows is also a good way to reach your market.

Always know your market. You won’t sell your product to prospects that aren’t in your market.

Set aside a marketing and advertising budget to promote your business plan.

Consider hiring a marketing firm to help you if you have the capital.

Get paid what you’re worth. Your ideas, proven success and time are all valuable assets. It’s not uncommon for business plans to be sold for hundreds of thousands, even millions of dollars. Don’t accept anything less than what you are comfortable with. Consult with an attorney and/or a CPA to help you determine an asking price.

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Can You Sell A Business Plan?

A business plan outlines managerial objectives and promotes businesses at any given time. When you draft a business plan, you must clarify each step and position the business in all directions, thereby preparing for growth and possible expansion.

There is, however, an argument that has arisen on whether it is possible to sell a business plan. While many think it's unnecessary to sell off a plan that could be considered intellectual property, we must view this topic from the entrepreneur's angle.

Business plans differ, so it's necessary to know the different types of plans because not all business plans can be relevant when sold. Types of business plans include:

Startup business plan

Startup business plans are written for new startups. They include detailed and structured operations for the smooth running of the business. They also describe products and services, financial implications, management team and market evaluation.

Startup business plans are the target of every investor, and whenever they find one of interest, they may offer a fortune for it because ideas rule the world.

These business plans are the most sold because most investors would rather put their money into getting assets than funding liabilities. They always want the ideas fresh, and a start-up plan should suit this purpose.

Strategic business plan

Strategic business plans describe in detail the enterprise's mission and vision statements, the company's short- and long-term goals, objectives, and strategies to be used to achieve them, and the overall success of the venture.

Certain investors do not have the time or energy to run analysis and research on new strategies. They may be willing to pay for such services; this has made it possible to sell strategic business plans. You can package good business strategies on a manuscript and get paid for your hard work.

Internal business plan

An internal business plan provides information for departments. It describes their functions to achieve a certain goal. Though it may not be of high demand because circumstances existing between two businesses are not the same, it can still boost administration.

Effective communication is a skill that some business administrators may not possess, but with plans like these, they understand how to pass information to their workers. Every business challenge has a peculiar solution, so there is little potential or guarantee for a particular company's internal plan to work for another company.

Operations business plan

Operations business plans outline employees' responsibility for the long run and calculate the company's deadlines on assignments.

Entrepreneurs may not quickly sell these plans because they specifically solve internal issues in the organization. Still, on a closer look, managerial skills in organizations are always the same, so investors are willing to exchange money to learn proper operations and office management.

If you understand office operations, you can sell an idea to a particular organization, and if the managers carry out these functions, it'll indeed affect their business model.

Feasibility business plan

Feasibility business plans describe the need for the product or service, the price they may be willing to pay, and the enterprise's profitability. They can also contain recommendations and solutions to any challenge that may arise from the product or service.

Feasibility plans are in high demand by potential investors who may have experienced hitches in different aspects of their business and crave a way out. Entrepreneurs who are business savvy can generate income by drafting possible feasibility studies after researching the organization and selling the outcome.

Growth business plan

Growth business plans are also known as the pension plan. It gives a detailed description of financial implications, investment plans and a complete description of the new company. Investors who would like to pay for such plans would be more satisfied when their company's description is well detailed.

Since growth is universal, it becomes imperative for a single formula to work for various organizations. Investors may choose to apply specific purchased plans to grow their organization, too. This is another plan that entrepreneurs can sell to potential investors in real time.

Final thoughts

Since there are different types of business plans addressing various aspects of a business, it can be conventional for prospective entrepreneurs to trade a business plan for money and thereby venture into another business of their choice. It poses as a trade of its own, where the current proposed business is capital intensive.

To answer the big question, entrepreneurs can sell business plans depending on the type of plan, the current state of the prospective entrepreneur, and their future desires for their business.

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