How to Sell Your Business Without a Broker

Valuation is the foundation of your sale. Use the right method for your business type:

• SDE (Seller's Discretionary Earnings): Best for Main Street businesses. Add your net profit + owner salary + non-recurring expenses + depreciation/amortization. Apply a 1.5–3× multiple.

• EBITDA Multiple: Best for larger businesses with professional management. Apply 3–6× for most industries.

• Revenue Multiple: Common for online businesses and SaaS. E-commerce: 2–4×. SaaS: 5–15× ARR.

• Asset Value: Used for asset-heavy businesses (manufacturing, real estate) where tangible assets drive value.

Buyers and their accountants will scrutinize your financials. Prepare:

• 3 years of Profit & Loss statements (P&L) — ideally reviewed or compiled by a CPA.

• 3 years of business tax returns (IRS Schedule C or corporate returns).

• Current balance sheet showing assets and liabilities.

• List of all add-backs (owner perks, one-time expenses, personal items run through the business).

• Monthly P&L for the current year-to-date.

The CBR (also called a Confidential Information Memorandum or CIM) is your sales document. Share it only after the NDA is signed. Include:

• Executive summary and business overview.

• Products/services, customer base, and market position.

• Financial summary and growth opportunities.

• Operations overview: staff, suppliers, location.

• Reason for sale (be honest — buyers will ask).

Never share financials without a signed Non-Disclosure Agreement. Your NDA should cover:

• Definition of confidential information (all financial, operational, and customer data).

• Non-solicitation clause (buyer can't poach employees or customers).

• Term (typically 2–3 years).

• Remedies clause (injunctive relief without bond).

• State governing law (use your state).

List your business where serious buyers look:

• BizBuySell.com — the largest business-for-sale marketplace (1M+ monthly visitors).

• Industry-specific forums and trade publications.

• Your personal and professional network — the best buyers often come through referrals.

• Business attorneys and CPAs who represent buyers.

Keep listings vague until the NDA is signed. Use a code name if needed.

Not every inquiry is from a serious buyer. Before sharing your CBR, require:

• Signed NDA.

• Buyer questionnaire: background, acquisition experience, funding source.

• Proof of funds or a letter from their bank/SBA lender confirming financial capacity.

• SBA pre-qualification letter if they plan to finance the purchase.

Tire-kickers waste your time and expose confidential information.

The LOI is a non-binding outline of the deal terms. Key terms to negotiate:

• Purchase price and deal structure (asset vs. stock sale, seller financing).

• Earnout provisions if any (if future payments are tied to performance).

• Exclusivity period (typically 30–90 days for due diligence).

• Deposits or escrow requirements.

• Training and transition period.

Have an attorney review the LOI — many terms set expectations that are hard to change later.

After signing the LOI, the buyer will verify everything. Prepare a due diligence data room with:

• Full financial records (tax returns, P&Ls, bank statements).

• Corporate documents (articles, bylaws, operating agreements).

• Customer contracts and supplier agreements.

• Lease agreements and real estate documents.

• Employee records (titles, salaries, benefits).

• IP documentation (trademarks, domain registrations, software).

• Pending or threatened litigation.

Due diligence typically takes 30–60 days. Respond promptly to requests.

The purchase agreement is the binding legal document that transfers the business. You need an attorney for this.

• Asset Purchase Agreement (APA): Buyer acquires specific assets and liabilities. Most common for small businesses — limits buyer liability for unknown debts.

• Stock Purchase Agreement (SPA): Buyer acquires the entire entity (C-corp or S-corp). Simpler for seller, but buyer assumes all liabilities.

Key APA sections: representations and warranties, indemnification, non-compete, non-solicitation, transition services, escrow/holdback.

After signing: notify employees, transfer licenses, file bulk sale notices if required, and close the escrow.