Selling a Business Checklist - Complete To-Do List

Going through a comprehensive checklist before putting your company on the market helps ensure you've covered all essential aspects.

Need help navigating valuation, legal documentation, and negotiations?

This blog post will offer clear, step-by-step advice and Exit Wise strategies to consider when preparing a business for sale.

Let's tackle the biz-for-sale challenges head-on. We'll help you feel more in control and confident in getting a satisfying business sell agreement.

Two businessman shaking hands.

TL;DR Summary - Selling a Business

Whether you have a large or small business on sale, to ensure a smooth and profitable transition, you need to:

  1. Get a professional business valuation and consult with advisors to align personal and business objectives.

  2. Gather the essential financial and legal documents to sell a business.

  3. Enhance your business appearance and address existing legal or financial issues.

  4. List the business, review and negotiate offers, and close the sale.

  5. Manage post-sale activities, including financial settlements and record-keeping.

TL;DR Summary - Selling a Business.

Documents Needed to Sell a Business

To be ready for sale, a company must have all documents in order. Below, we outline what documents you need to ensure a smooth and legally compliant transaction:

Financial records and statements

Gather these documents to reflect your business's financial health:

  • Profit and loss statements (last 3-5 years)

  • Balance sheets

  • Cash flow statements

  • Bank statements

  • Credit statements

  • Sales records and projections

Tax documents and filings

Potential buyers want to know if your business is compliant with fiscal regulations, and the tax documents below can demonstrate it:

  • Federal and state income tax returns (last 3-5 years)

  • Sales tax returns

  • Payroll tax returns

  • Any other relevant tax documents

For detailed and accurate information on federal tax obligations related to selling a business, consult the Internal Revenue Service (IRS) website.

Legal documents

Providing the following documents should assure potential buyers that your business is compliant with zoning laws and operates within the legal framework:

  • Business formation documents (e.g., articles of incorporation, certificate of incorporation)

  • Business licenses and permits (e.g., certificate of occupancy, land use permit, environmental assessments, etc.)

  • Legal judgments or pending litigation documents

A person and another person are looking at a document in an office.

Employee records and contracts

To reflect your company's employment standards and commitment to maintaining a professional work environment, provide the following:

  • Employment agreements

  • Non-disclosure agreements (NDAs)

  • Non-compete agreements

  • Employee manuals and policies

  • Benefit plans and retirement account records

Supplier contracts and agreements

Providing supplier contracts and agreements like the ones below highlights your business's external relationships and the ability to maintain stable supply chains:

  • Current supplier/vendor contracts

  • Service level agreements (SLAs)

  • Exclusive supply agreements

  • Purchase orders

Customer records and agreements

This data reflects your business's market presence and customer relationship management:

  • Client contracts and agreements

  • Order histories

  • Customer lists and contact information

  • Customer service records

Inventory lists

Inventory lists showcase your inventory management and operational capacity. Provide potential buyers with:

  • Current inventory details

  • Inventory management records

  • Historical inventory levels

A person in a business suit is holding a folder.

10 Essentials to Selling a Business

Selling your business is a significant decision that requires careful planning and strategic execution.

Follow these steps on how to prepare a business for sale and transition smoothly and profitably:

1. Preliminary Steps

First, understand your business's value and align your personal and business objectives for the sale:

  • Business Valuation: Obtain a professional valuation to understand the worth of your business.

  • Reason for Selling: Clearly define why you are selling (retirement, new ventures, etc.).

  • Consult Advisors: Engage a lawyer, accountant, and business broker for professional advice.

  • Exit strategy planning: Develop a clear plan for your exit from the business.

  • Personal financial assessment: Evaluate personal financial implications post-sale.

2. Financial Documents

These well-organized financial records build trust and clarity with potential buyers, boosting their confidence and simplifying the evaluation process:

  • Profit and loss statements: Gather the last three to five years' records.

  • Balance sheets: Provide current, up-to-date, and historic balance sheets.

  • Tax returns: Collect tax returns for the previous three to five years.

  • Cash flow statements: Illustrate the cash flow in and out of the business.

  • Debt and liability statements: Include details of any outstanding debts or liabilities.

  • Audit reports: If available, provide recent audit reports for transparency.

For financial reporting and disclosure requirements guidelines, consult the Securities and Exchange Commission (SEC) website.

3. Legal Documents

Legal documentation validates your business's legitimacy and operational compliance. Make sure you gather the following:

  • Business licenses and permits: Check that they're all current and transferable.

  • Incorporation documents: Provide articles of incorporation and other formation documents.

  • Contracts and leases: Pull out existing contracts with clients or lease agreements.

  • Intellectual property documentation: Verify your patents, trademarks, copyrights, etc.

  • Compliance records: Provide documentation of compliance with industry regulations.

  • Litigation history: Disclose any past or ongoing legal proceedings.

A person and another person sitting at a table with a laptop.

4. Business Operations

Want to highlight business strengths and growth potential? Give potential buyers a blueprint of your business's day-to-day functioning with the following data:

  • Business plan: You need a current and detailed business plan.

  • Employee information: You want to show the contracts, roles, salaries, and benefits of current employees.

  • Customer lists: Include detailed profiles of current and past clients.

  • Supplier/vendor contracts: Provide details of current supplier and vendor agreements.

  • Operational manuals and SOPs: Include all the documents that ensure compliance with legal and regulatory standards.

  • Inventory records: Pull out detailed historical and current inventory lists.

5. Marketing and Sales

This information not only demonstrates past and current performance but also helps buyers assess future growth opportunities:

  • Marketing materials: Gather samples of your brochures, flyers, and online marketing content.

  • Sales records: Prepare a detailed analysis of sales patterns and customer demographics.

  • Market analysis: Provide insights into the current market trends and demonstrate how your company positions.

  • Customer feedback and reviews: Include insights into customer satisfaction from any recent feedback you got.

  • Digital marketing footprint: Compile online marketing strategies and presence details to show how your business is perceived online.

6. Preparing for Sale

Preparing your business for sale involves aesthetic and operational enhancements to attract the right buyers. Here's what you must do at this step:

  • Improve business appearance: Make the business premises visually appealing.

  • Address issues: Resolve any outstanding legal or financial matters.

  • Confidentiality agreements: Draft an agreement for prospective buyers to sign before giving them access to your business data.

  • Operational improvements: Update or repair essential equipment and facilities.

  • Business performance analysis: Review and document business performance metrics.

A person sitting at a desk with a notebook and pen.

7. Listing the Business

A well-executed listing strategy increases visibility to potential buyers, ensuring a wider pool of interested parties. Make sure you focus on the following:

  • Sales memorandum: Write a document that outlines your business for potential buyers, including:

    • Executive summary

    • Business description

    • Market analysis

    • Financial information

    • Assets and resources

    • Management and personnel

    • Growth potential

    • Reason for sale

    • Terms of sale

  • Advertising strategy: Plan how and where to list the business for sale.

  • Screen potential buyers: Qualify buyers to save time and avoid sharing business information with the wrong persons.

  • Target buyer profile: Identify and outline your ideal buyer profile.

  • Confidentiality strategy: Plan for maintaining confidentiality during the sale process with NDAs, discreet marketing tactics, and secure virtual data rooms.

8. Negotiation and Due Diligence

Negotiation and due diligence are critical phases where offers are evaluated and verified. This step involves:

  • Evaluation criteria: Establish criteria for evaluating offers.

  • Initial offers: Review and respond to purchase offers.

  • Due diligence: Allow the buyer to verify business information.

  • Negotiation: Set your negotiation terms like price, sale terms, and transition, and work with buyers to agree.

  • Legal review: Have legal advisors review and advise on offers and agreements.

A person is holding a piece of paper in front of their face.

9. Closing the Sale

Closing the sale requires attention to detail and adherence to legal and financial protocols. You must focus on:

  • Closing checklist: Develop a comprehensive checklist for the closing process.

  • Final agreement: Draft and sign the final purchase agreement.

  • Transfer of assets: Ensure smooth transfer of all business assets.

  • Notify employees and clients: Communicate the change in ownership and prepare to address any concerns your employees and clients might have.

  • Post-sale transition: Plan for a transition period, if necessary.

  • Regulatory compliance: Ensure all regulatory requirements are met for the transfer.

10. Post-Sale

Effective post-sale management sets the stage for the new owner's success and your next venture. Prepare for these last bits:

  • Financial settlements: Ensure all financial matters are settled.

  • Record keeping: Maintain records of the sale and all related documents.

  • Consultation availability: Be available for consultation post-sale if agreed upon.

  • Post-sale business involvement: Define any ongoing participation in the business, if necessary.

  • Tax planning: Consult with a tax advisor for post-sale tax planning.

Business people shaking hands at a table with papers and laptops.

Frequently Asked Questions (FAQs)

Here's what else you might want to know about successfully selling a business:

How long does it take to sell a business?

Selling a business can take a few months to a couple of years. Typically, it averages around 6-9 months, depending on the business's complexity, market conditions, and finding the right buyer.

If you sell a business, how is it taxed?

When selling a business, the profit is typically taxed as capital gains. The tax rate depends on your tax bracket, how long you've owned the company and its structure.

Who pays closing costs when selling a business?

Closing costs in a business sale are usually negotiable. The buyer and seller often share these costs, which ultimately depend on the negotiation agreement.

Do I need a business broker to sell my business?

A business broker can be helpful, especially for navigating complex processes, finding qualified buyers, and negotiating deals. Their expertise often leads to a smoother and potentially more profitable sale.

What happens to employees after the sale?

Post-sale, employees may either continue with the new owner, be offered a severance package, or be let go. The outcome depends on the sale terms and the new owner's plans. Communication and transition plans are essential during this change.

Interested in learning more? You might enjoy these guides:


Our checklist for selling a business is comprehensive. There's a lot you need to cover.

Now that it's time to reap the rewards from years of hard work, don't leave the outcome of your business sale to chance.

Be proactive and choose Exit Wise to guide you through this crucial process. We're here to:

  • Ensure you sell faster and for more money.

  • Connect you with specialists on how to list a business for sale.

Contact Exit Wise today and take control of your business's future.

Brian Dukes.
Brian Dukes

Brian graduated from Michigan Technological University with a BS in Mechanical Engineering and as Captain of the Men's Basketball Team. After a four-year stint at Deloitte Consulting, Brian returned to school to get his MBA at the University of Michigan. Brian went on to join his first startup, a Ford Motor Company Joint Venture, and cofound a technology and digital marketing services agency. Through those experiences, Brian embraced the opportunity to provide M&A education and support to his fellow business owners as they navigated their own entrepreneurial journeys.

Find Your M&A Expert Today

Let Exitwise introduce, hire and manage the best, industry specialized, investment bankers, M&A attorneys, tax accountants and other M&A advisors to help you maximize the sale of your business.