Questions to Ask Before Selling My Business
Twenty questions to work through before you put a business on the market: how it will be valued, what you would actually net after tax and fees, who the realistic buyers are, which parts of the price are deferred or at risk, what you would be signing in warranties and a non-compete, and what you would do on the Monday after. Most are for your accountant, lawyer or broker; the last two are for you.
The questions
Open any question for the note
What would a buyer value this on, and what is the range?
Why ask it
Ask which basis applies: a multiple of adjusted earnings, recurring revenue, or assets plus goodwill. Owners often carry a number from an industry rumour. Knowing the method lets you see which of your own figures the price is sensitive to.
What would I actually net, after tax, fees and anything I have to repay?
Why ask it
The headline price is not the outcome. Work backwards from the sum you need for whatever comes next, subtracting tax, adviser fees, loan repayments and any personal guarantees being released, and see whether the deal clears it.
How much of this business is me?
Why ask it
If the customers call your mobile and you approve every quote, a buyer sees a job rather than an asset, and will price it accordingly. The honest answer usually points at a year of delegation work before a sale, which is where most of the value is added.
Who are the realistic buyers?
Why ask it
A competitor, a financial buyer, a larger customer, your own managers and a family member each pay differently, diligence differently, and treat your staff differently. Naming the likely type early determines how you prepare and what you disclose.
How much of the price would be paid at closing, and how much later?
Why ask it
Deferred consideration, escrow holdbacks and vendor loans are common, and they move risk onto you. Ask for the split in percentages, because two offers with the same headline number can be very different amounts of money.
If part of the price is an earn-out, what are the targets and who controls them?
Why ask it
Earn-outs depend on performance you will no longer fully control. Ask what happens if the buyer changes pricing, cuts marketing, or merges your accounts into theirs, and whether the agreement protects the conditions your targets assume.
How long would I have to stay after closing, and doing what?
Why ask it
Transition periods run from weeks to years, and there is a large difference between consulting two days a week and reporting to a new owner as an employee. Get the role, the hours and the exit date written into the terms.
Would my books survive due diligence?
Why ask it
Personal expenses run through the company, informal contractor arrangements, unreconciled accounts and missing contracts all show up. Each one either reduces the price or shakes the buyer's confidence in the numbers, which is worse.
How will this be taxed, and does the structure change that materially?
Why ask it
Asset sale versus share sale, and the timing across a tax year, can change your net by a substantial margin. Get this modelled before you negotiate, since the structure is much harder to change once a buyer has anchored on it.
What will the advisers cost in total, and how are they paid?
Why ask it
Broker commission, legal, accounting and tax advice add up, and some fees are payable whether or not the deal completes. Ask for a fee schedule and for the retainer and success-fee split before you engage anyone.
How concentrated are my customers, and what will a buyer discount for it?
Why ask it
If a third of revenue sits with one client, buyers price the risk of losing it. Ask what proportion triggers concern in your sector, and whether spreading revenue over a year would earn back more than it costs to do.
Are my contracts, leases and licences transferable?
Why ask it
Change-of-control clauses can give a landlord, a lender or your largest customer a veto over the sale, or the chance to renegotiate at the worst moment. Find these before a buyer's lawyer does.
What non-compete would I be signing, and how long and how wide is it?
Why ask it
This determines what you are permitted to do next, and buyers routinely ask for more scope than they need. Read the geography, the definition of the industry, and whether it stops you consulting or investing in adjacent work.
What warranties would I be giving, and what could I be pursued for after closing?
Why ask it
Sellers commonly give personal assurances about accounts, tax, employment and intellectual property, surviving for years. Ask for the cap, the time limit, and whether warranty insurance is available, because this is your remaining exposure.
If I lend the buyer part of the price, what happens if the business fails under them?
Why ask it
Vendor finance often closes a valuation gap and leaves you as an unsecured creditor of someone else's decisions. Ask what security you would hold, and what your position is if they default in year two.
When do I tell my staff, and what keeps the key people through the transition?
Why ask it
Told too early, people leave and the value goes with them; told too late, they hear it as a betrayal. Ask about retention arrangements for the two or three people the buyer is actually paying for, and who funds them.
What do I say to customers and suppliers, and when?
Why ask it
A leak during diligence can cost you customers and the deal at once. Agree the message and the timing with the buyer in writing, and decide in advance who speaks to your largest accounts.
If this deal collapses halfway through, where does that leave me?
Why ask it
By then a competitor may hold your customer list, margins and payroll. Ask what the confidentiality agreement actually restricts, what you can withhold until late in the process, and whether there is a break fee.
What am I doing the Monday after completion?
Why ask it
Sellers with no answer often regret the sale regardless of the price, or sabotage the negotiation to delay it. Having a concrete next thing, even a modest one, makes it far easier to accept a fair offer and stop pushing for more.
If I did not sell, what would I change instead?
Why ask it
Sometimes the honest answer is exhaustion rather than exit: a manager, fewer clients, or a proper holiday would fix it. Working out the alternative gives you a real reserve position, which is also the strongest thing to have in a negotiation.
Preparing a business for sale
Practical guidance for the conversation itself
Get the right people around you
Take tax advice before you take offers
The structure of a sale drives your net proceeds, and the choices narrow once a buyer is at the table. This is the one piece of advice that reliably pays for itself, and it needs to come early.
Understand how your broker is paid
Commission on the headline price gives an incentive to close, and to close at a number rather than on the terms that matter to you. Ask about their record in your sector, and whether their fee reflects deferred consideration you may never receive.
Use a lawyer who does this regularly
The general solicitor who handles your leases is unlikely to have negotiated warranties, earn-outs and disclosure schedules recently. Ask how many completions they have done in the last year at roughly your size.
What buyers examine
- Three years of clean accounts, with any owner adjustments listed and defensible rather than argued for later.
- Customer concentration, contract length, churn and how much revenue recurs without effort.
- Employment records: contracts, classification of contractors, holiday liabilities, and who is genuinely key.
- Ownership of what you sell: trademarks, code, domains, designs, and whether a former contractor still holds rights.
- Leases, licences, insurance and any change-of-control clause that needs third-party consent.
- How dependent the business is on the owner, and what documented processes exist without you.
Terms that decide the outcome
Compare offers by cash at closing, not headline price
A lower offer paid in full can beat a higher one with a third in an earn-out and a holdback. Model each offer as what arrives in your account, and when, with a discount for anything conditional.
Negotiate the warranty cap and the time limits
Your exposure after closing is a term, not a fixed law. Caps, time limits, disclosure and insurance are all negotiable, and they matter more than a few percent on price.
Fix the transition in writing
Hours, duties, reporting line, end date and what happens if you are asked to stay longer. Sellers who leave this vague often spend a year as an employee in a company they used to run.
Common mistakes
- Deciding a price from a rumour about what a competitor sold for, without knowing the terms of that deal.
- Starting the process with accounts that mix personal and business spending.
- Telling staff or customers before the deal is firm, or telling nobody until the day.
- Accepting an earn-out without protection for the conditions the targets depend on.
- Negotiating hard on price and signing whatever is put in front of you on warranties and non-compete.
- Selling without any plan for what comes next, then trying to renegotiate late to delay the ending.