The 15-step document outlines the process for a successful exit from a business by selling it. It begins with preparing financial records and valuating the business. It then discusses creating marketing materials, listing the business for sale, identifying prospective buyers, qualifying buyers, making and negotiating offers, managing due diligence and closing the deal. The final steps involve transitioning ownership and ensuring the full sale value is received. The overall process guides business owners on successfully marketing and selling their company.

1. 15 Steps to a Successful Exit
By Michael O’Donnell
Managing Partner, SellBiz.co
mike@sellbiz.co

2. Seller Preparation
nticipate what a qualified buyer will want to see
and will need to VERIFY, in order to make you an
informed offer.A
This step involves getting your financials and business records in
order. There may also be small improvements that can be made
which could boost your valuation. A little preparation goes a long
way towards ensuring a faster sale at the price you want. Assemble
all the necessary information which will be required by buyers.
Step
1

3. Business Valuation
rice your business to sell.
PThis step involves knowing how most buyers will value your business
within 20%. It includes preparing a ‘Owners Estimate of Value’ and a
‘Seller Discretionary Earnings (SDE)’ Worksheet, which shows
prospective buyers how you arrived at your selling price. The SDE
Worksheet also shows prospective buyers how much you really net,
since your business is likely paying for certain expenses that a new
owner would not incur.
Step
2

4. Blind Teaser
rite a compelling teaser that prompts serious and
qualified buyers to request more information on your
business opportunity.W
Step
3
This step involves creating interest among prospective buyers without
disclosing the name or location of your business. A blind teaser will be
needed to list your business on the Business Listing Services. It’s also
used as a tool when reaching out to qualified buyers. It’s called a “blind
teaser” because it provides buyers with a high-level overview of the
opportunity without divulging any specific or confidential details.

5. Step
4Selling Memorandum
rite a an informative and accurate Selling Memorandum
that provides the essential details on your business.
WThis step involves providing prospective buyers with all the relevant
facts and figures on your business. It’s your primary selling document
and is used by buyers to initially assess your business, determine if it is
a match with their criteria and objectives, and make you an offer.

6. Step
5Disclosure Documents
raft the disclosure documents required to sell your business
and begin engaging with buyers.
D
This step involves preparing a Non-Disclosure Agreement (NDA),
Shareholder Consent to Sell, Seller Disclosure Statement, and Letter of
Destruction. These are expected, perfunctory documents needed in the
selling process.

7. Step
6Business Listing Services (BLS)
dvertise your business for sale by owner.
AThis step involves knowing the appropriate places to list your business
for sale and the best practices for generating leads through the various
Business Listing Services. There are several good sites and a bunch of
worthless sites. It’s important to know the difference so you don’t waste
time and money. Creating a GREAT listing profile is an art and a science.
With more than 50,000 listings on the BLS at any one time, you’ll need to
know how to break through the clutter and grab the attention of
prospective buyers.

8. Step
7
BuyerProspecting
dentify and contact individuals and businesses that might be interested in
buying your business.
IThis step involves identifying, researching, qualifying, and initiating
contact with prospective buyers. Listing your business on the BLS and
waiting for buyers to contact you is but one strategy. The best strategy is
identifying, qualifying and assembling a list of the most likely buyers of
your business. You will need a proactive outreach campaign to attract
high quality suitors.

9. Step
8Buyer Qualification
etermine whether a prospective buyer has the willingness and
ability to acquire your business before releasing the name and
location of your business, and before disclosing any
confidential details.
D
This step involves avoiding the tire kickers, lookie-loos, and people
simply trying to collect competitive intelligence on you and your
business. Disqualifying buyers is as important as qualifying buyers, so
you can devote the time and effort on the serious ones.

10. Step
9Buyer Brokers and Intermediaries
eprepared to receive inquiries from buyer brokers and
intermediaries.
B
This step involves knowing how to deal with inquiries from buyer
brokers and intermediaries. You need to be prepared to effectively deal
with the professionals that the buyer has retained to help them acquire
a business. They can make or break your deal.

11. Step
10Seller Qualification and Initial Inspection
e prepared to answer the buyer’s questions and to host
onsite inspection of your business.
B
This step involves how to engage with interested buyers when they
conduct inspections of your business and records. What to tell them, or
show them, and what not to tell them or show them. Knowing how to
conduct yourself on phone calls and in meetings with interested buyers
is part art and part science. You can also expect a number of phone calls
and meeting with different partners and representatives of the buyers.
These interactions can make or break a deal.

12. Step
11Entertaining and Countering Offers
egotiate the highest and best offer for your business.
N
This step involves entertaining offers, negotiating and countering offers.
You should bone up on the common terms you can expect to see in an
offer. The offer may take several different forms depending upon the size
and nature of your business, including Indication of Interest (IOI), Letter
of Intent (LOI), and Term Sheet.

13. Step
12Due Diligence
repare for and manage the Due Diligence process to ensure a
timely and successful closing.
PAssuming the offer is good, this is the crucial step that will determine if
the deal will close. This step involves navigating the due diligence traps
and keeping the deal on the rails, while also keeping other interested
buyers warm in case the deal falls apart.

14. Step
13Purchase and SaleAgreement
repare to negotiate the Purchase and Sale Agreement.
PThis step involves knowing the terms and conditions in a good purchase
and sale agreement. Also, knowing the difference between an asset sale
agreement and a stock purchase agreement, depending upon the nature
of your business and how the deal will likely be structured by a buyer. It’s
advisable to have good legal counsel for this step.

15. Step
14Transaction and Closing Management
reare to sign the final agreement and ancillary documents.
PThis step involves knowing the best practices for managing the transaction and the
closing process. It would be nice if the buyer would just give you a check and you give
him or her the keys, but it doesn’t work that way! There are all kinds of issues to
settle at closing, like lease assignment, inventory reconciliation, and accounts
receivables. Lots of deals fall apart at closing because the seller is caught unawares.

16. Step
15Transition Management
nsure a smooth transition to the buyer; collect the full value
you bargained for.
EIn most business sales, there is a transition period. You, as the owner, may have
agreed to stay on for a while to help the new owner come up to speed. You may
provide seller financing, which requires you to keep tabs on the business to ensure
you get your payments. Your sale may also include an escrow “hold back” or “earn
out” that pays you in the future based on certain agreed upon events or milestones.
This step involves good transition management best practices.

17. Follow the Steps!
Have an AWESOME exit and enjoy the fruits of your labor.
By Michael O’Donnell
Managing Partner, SellBiz.co
mike@sellbiz.co