How to Sell a Business by Owner: Step-by-Step Guide

Step 1 — Decide If FSBO Is Right for Your Deal

Selling without a broker works best when at least two of these conditions are true: the business is profitable and clean (no complex liabilities, regulatory issues, or declining revenue), you have a clear buyer in mind or a defined buyer pool to approach, and you have time to manage the process — expect 3–6 months of focused work.

FSBO is harder when: the business needs storytelling to justify the valuation (complex add-backs, turnaround thesis), the industry has opaque comparable transaction data that a broker would help assemble, or the deal requires extensive buyer education that a professional CIM and broker presentation would provide.

The calculus also depends on deal size. On a $400K sale, broker commissions of $40K–$48K might not be worth the complexity of running a solo process. On a $2M sale, $200K–$240K in savings changes the math. If you are on the fence, compare your estimated broker commission against your honest assessment of the time and energy required to run the process yourself.

For context on how brokered sales compare to FSBO processes, the how to sell my business with a broker guide covers what brokers do and where they add value — useful reading whether you use one or not.

Step 2 — Calculate Your Valuation Before You List

The biggest FSBO mistake is listing at the wrong price. Too high and you attract no qualified buyers. Too low and you leave money on the table. Both outcomes are preventable with a correct valuation before you list.

Calculate your adjusted EBITDA: net income from tax returns, plus tax add-backs, plus normalizing adjustments (excess owner comp, personal expenses, one-time non-recurrings). Then apply the correct industry multiple range. Home services: 3.5–6x EBITDA. Healthcare: 4.5–8x. Professional services: 4–7x. B2B services: 4–7x.

Run your numbers through the Valuation Estimator to get an industry-calibrated low, mid, and high range. Price at the midpoint and be prepared to support the high end with documentation during diligence. For a complete breakdown of the valuation calculation and what moves your multiple, the how much is my business worth guide covers the full framework.

Step 3 — Prepare Your Business for Sale

Buyers and lenders underwrite three years of financial history. The 12–18 months before going to market are your opportunity to improve what they will see.

**Clean up the financials.** Work with your CPA to reconcile your P&Ls against tax returns, document every add-back with receipts and payroll records, and produce a clean trailing twelve-month (TTM) EBITDA schedule. Lenders will underwrite the TTM, not just the annual averages.

**Reduce customer concentration.** Any single customer above 25% of revenue is a red flag. Spend 12 months diversifying. Winning two new mid-size accounts can push your top customer from 35% to 22% of revenue — a meaningful multiple improvement.

**Build management independence.** Promote or hire someone who can run the business without you. The first question every qualified buyer asks is: what happens to the business if you leave on Day 1? The answer needs to be "it keeps running" — not "I'll have to stay for a year."

**Document your processes.** A buyer who inherits a business with documented operating procedures, service delivery workflows, and customer onboarding guides is inheriting a transferable business. One who inherits a set of practices that live only in the owner's head is inheriting a key-man risk that requires a longer, more expensive transition.

For the complete pre-sale preparation roadmap — with a 24-month timeline — the how to get your business ready to sell guide covers every step.

Step 4 — Create Your Marketing Package and Find Buyers

Your marketing package does not need to be a 60-page investment memorandum. It needs to be a clear, honest document that answers the questions every serious buyer will ask within the first ten minutes.

**The one-page business summary.** Business description, years in operation, revenue and EBITDA for three years, headcount, location, and reason for sale. Use this as the teaser — shared before signing an NDA.

**The full package (post-NDA).** Three years of tax returns, a TTM P&L, the add-back schedule with documentation, a customer overview (concentration, contract status), an operations summary, and an asset list.

**Where to find buyers without a broker:** - BizBuySell.com — the highest-traffic FSBO listing platform for businesses under $5M - Direct outreach to strategic buyers — competitors, suppliers, adjacent businesses - Your professional network — attorney, CPA, banker, trade association contacts - LinkedIn — acquisition entrepreneurs and search fund operators are active here

For the complete buyer-finding framework from the seller's perspective, the sell my business without a broker guide covers every buyer sourcing channel in detail.

Step 5 — Screen Buyers and Negotiate the LOI

Not every inquiry deserves your time. Screen buyers with three questions before sharing your full package: Are they financially qualified (ask for proof of funds or SBA pre-approval)? Do they have a realistic understanding of your asking price range? Do they have operational experience in your industry or adjacent sectors?

When a qualified buyer is serious, they submit a Letter of Intent. The LOI establishes the key deal terms before both parties invest in legal and due diligence work.

Key LOI terms to negotiate: purchase price (and whether it includes real estate, inventory, or working capital), deal structure (all-cash, SBA-financed, seller note, or earnout), due diligence period and exclusivity window, seller transition period and compensation, non-compete scope and duration, and any major contingencies (SBA approval, lease assignment, license transfer).

Seller notes — where you carry part of the purchase price as a loan the buyer repays — are common in owner-sold deals. They signal confidence in the business's forward performance and can unlock buyers who might otherwise not qualify for the full purchase price. The seller financing guide covers how seller notes are structured.

The LOI Generator produces a complete, professional Letter of Intent with deal structure, earnout provisions, non-compete terms, and financing contingency in under two minutes.

Step 6 — Due Diligence and Closing

Due diligence is the 30–60 day verification period after the LOI. Create a virtual data room (Google Drive or Dropbox) organized by category — Financial, Legal, Operations, HR, Customers — and load it with every document before the buyer's first request. Sellers who are organized and responsive close faster than those who produce documents slowly.

Two professional advisors you need regardless of whether you use a broker:

**An M&A attorney.** The purchase agreement is a complex document with representations and warranties, indemnification provisions, escrow terms, and post-close covenants. A business attorney with M&A experience is non-negotiable. Budget $5K–$20K depending on deal complexity.

**A tax-focused CPA.** Asset sale vs. stock sale treatment, installment sale options for seller notes, state tax considerations — a session with a CPA before signing the purchase agreement saves material tax dollars and prevents surprises at close.

Closing involves wire transfer of funds, bill of sale execution, assignment of contracts and licenses, and delivery of all keys, codes, and access credentials. If SBA financing is involved, the closing happens at the SBA lender's closing attorney's direction and requires several additional documents. Your M&A attorney handles this process.

For the complete due diligence framework — knowing what the buyer is looking for in your documents — the due diligence checklist for buying a small business is worth reading from the seller's perspective. Knowing what's coming lets you prepare rather than react.