This is the list to work through before a broker, a buyer or an adviser is involved, because most of what decides the outcome is settled by then. It is short on purpose: a checklist nobody finishes is a document rather than a tool.
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The checklist of first steps to selling a business
Three years of financial statements a stranger can follow, agreeing to the tax returns. A written add back schedule with a document for each line. The lease read, with its remaining term and any assignment restriction noted. Contracts checked for change of control clauses. An employee list with pay and terms. A written paragraph on what happens to the business when you stop turning up. And a number: what you need the sale to produce.
Questions to ask when selling a business, starting with yourself
Am I optimizing for price, for speed or for what happens to the people. What would I do the day after closing. Is the business better next year than this year, and if so is waiting worth it. Would I buy this business at my own asking price. The last one is uncomfortable and is the single most useful test of a price expectation.
Questions to ask a broker when selling a business
Which businesses like mine have you sold in the last two years, and may I speak to two of those sellers. Who will actually do the work. How many buyers will you approach and how. What is the fee, the minimum and the tail. And what would you do if I insisted on a price you thought was too high. Ask for the answers in writing.
Questions people ask about selling a business checklist
When should I start this?
A year before you want to be on the market if the business depends on you; three months if it already runs without you and the records are clean.
What is the most commonly missed item?
The lease. Owners read it once at signing and discover the assignment restriction during exclusivity, when there is no time to negotiate it.
Do I need all this for a small business?
Yes, and it is quicker than it looks. A buyer's lender asks for the same set regardless of size.