Buying a Business
sell a florida business

Selling Your Business... What to Expect

When selling a business there are a multitude of moving parts that must take place to achieve a successful sale as well as a successful transition. One key element of our job as business brokers is to set your expectations to help make this process as smooth as possible.

Setting the Stage

Prior to marketing your business, we must understand your business intimately. Please know that we are not the IRS, and it is of the utmost importance that you trust us to share any information relevant to the sale of your business. This part of the process is key as it sets the stage for the whole process moving forward towards a successful sale and transition. This part of the process can be done in just a few days if we get what we need.

Items we need to understand: P&Ls, Balance Sheets, explanations for increases or decreases in sales and/or COGs, past or pending lawsuits, employee rolls, supervisor rolls, your rolls, age of equipment, amount of inventory, how you got started, why you are retiring, discuss the business day-to-day activities, etc. This is important for four reasons:

  • Determination of business value
  • CIM (Marketing materials)
  • Buyers have questions we need to be able to intelligently answer
  • Buyer/seller interview (see below)

Recorded Buyer/Seller Interview

After we learn everything there is to know about your business, we will prepare several questions that a typical buyer will ask. Buyers will want to talk with the seller; however, we sometimes receive 4 or 5 requests per week. Each interview lasts about an hour. That time can add up, and your time is valuable. Therefore, we will prepare a litany of questions specific to your business that we will ask you in the recorded interview. As you review these questions prior to the interview, please feel free to add or discuss any of them with us prior to our recorded interview.

Once we are ready to go, we will have a recorded interview on Zoom with just our team and you. We will ask all the prepared questions, and you will already know how you’re going to answer them. These questions will talk about how you got the business started, why you want to sell, day-to-day tasks, staff, finances, COGs, equipment, Account Receivables, etc.

The recorded interview will allow the interested buyers to feel they already know you and your business to a degree where they can decide if they want to progress to the next step. This is key, as it allows us to present the business to any initial inquiries without disrupting you throughout your workday.

Marketing/Finding the Buyer

We prepare a professional CIM (Confidential Information Memorandum). This is confidential! No one will see this without a signed NDA (Non-Disclosure Agreement) and our team “vetting” the potential buyer.

We market to both the general public (confidentially) and to professional business brokers. General public sites include BizBuySell and BizQuest. We pay for premium placement on these sites.

Another form of marketing is direct marketing to other professional business brokers. We are members of the IBBA (International Business Broker Association) as well as the BBF (Business Brokers of Florida). We will distribute your listing on both of these platforms, which market internationally on the IBBA (International Business Brokers Association) site and BBF (Business Brokers of Florida). These sites are private and not accessible to the public. Only brokers can access the information for their clients, who have also signed a NDA.

We will also market your business confidentially on our website and our social media platforms.

Certain businesses will attract strategic buyers (those already in the business looking to expand), successful entrepreneurs who look for profitable businesses, and Private Equity Groups. We research these buyers and private Equity Groups that have an appetite for your type of business and market to them. We also have a database of buyers who have already signed a NDA to work with our brokerage and prefer your industry. We will discuss your business with them.

The following are the steps involved in our marketing strategy with any potential buyer:

Step 1:  Send an introductory listing description to these groups (no company identifiers will be on this listing description) along with a NDA.

Step 2: Approximately 50–75% will send back the NDA signed. Once received and we successfully “vet” the buyer, at this point we forward the CIM with full details of the business.

Step 3: Once the potential buyer says they are interested, we send a RFP (Request for Proposal) with very specific items to be included in the IOI (Indication of Interest) or LOI (Letter of Intent), including their background in the industry, seller financing piece, seller post-closing involvement, etc.

Step 4: Seller reviews the RFP's, IOI's, and LOI’s and chooses the top 2 or 3 you want to interview.

Step 5: This step is not always necessary; however, if needed, we will negotiate the terms of the IOI or LOI until both parties are in agreement.

Step 6: We go to contract.

Due Diligence

Once the contract is in place, due diligence begins immediately. At this point, the seller must provide to the buyer all requested documentation, such as balance sheets, profit and loss statements, tax returns, employment records, client lists, contracts, vehicle records, POS statements, bank statements, and anything else desired by the buyer. Should you have any questions about the information requested being unreasonable, we are here to guide you, but expect it to be a bit overwhelming. Due diligence can run anywhere from 7 to 90 days, yet 45 days is typical. It is common for the buyer to request an extension. Should this happen, we can request that additional money be deposited into escrow to show good faith.

In larger acquisitions, the seller may be requested to pay for a Quality of Earnings Report. The buyer will pay over $100,000 in accounting and legal fees. The seller may pay for the Q&E report, which bears a significant cost.

Updating Financials

Buyers will request updated profit and loss statements and loss sheets. This includes potential buyers during the buyer search phase or, or the contract, during the due diligence phase. The buyer’s lender will also want monthly updated financials. If you run Quick Books, it’s easy; just push a button and send it to us each month. If you do not have Quick Books, please give us permission to communicate with your accountant or CPA so we can request the necessary documents as we go. This permission will make your life way easier!

Selling Timeline: How long will it take to Close The Sale?

We tell our clients we will be married for a year. From start to finish, even if the business is priced at market value, it can take up to a year. The process involves marketing, the buyer search phase, contract negotiations, due diligence, and financing. It may close sooner, but the best advice we can give you is to plan for one year. This is not selling a house… It’s your hard work, and someone else wants it to be theirs. The new owner is under a major financial decision, as I am sure you can understand and therefore will be thorough. For that reason, there are a multitude of moving parts that take time and can feel demanding on you. That is just part of the process.


Another major fact of life in this process involves the post-closing. No buyer is going to hand you a check for the full purchase price, pat you on the back, and wish you a great retirement. The buyer wants the seller to have a vested interest in their success. That’s ok, so long as we know what to expect and how to structure any seller financing and seller involvement after the sale.

  1. Post-Closing Employment

    Seller will most likely have some post-closing involvement. We always offer two (2) weeks of training at $0 cost to the buyer. Most buyers would like the seller to stay on for some time as a “consultant”, either in his/her current role, or to be available for phone calls. SBA will not allow the seller to stay on for more than one year. Seller will be compensated for post-closing consultation work, which is negotiated either at the time of IOI, LOI or contract.

  2. Covenant Not to Compete

    A seller cannot close a business and go down the street and compete against his/her Buyer. SBA has its own requirements for a non-compete as well. A typical non-compete will extend a geographical restriction of 5 miles to the entire state, depending on the type of business. In many cases, that geographical area is 7–10 miles or county-wide. The time frame is generally 5-7 years. We will negotiate these terms during the LOI to Contract phase; that said, when the buyer goes in for financing, the lender may come back with something else. Please don’t be surprised by this lender's request.

  3. Seller Financing 

    100% of sellers initially tell us that they will not provide any seller financing. We understand; however, 85% of businesses do sell with some seller financing. We must set your expectations from the get-go in regard to seller financing so you are prepared. The seller's financing is secured by a note and security agreement, for which the buyer personally guarantees the performance of the note. The seller note is typically paid back in 2-3 years with a single balloon payment, although it may be amortized over 10 years. The interest rate may be comparable to the SBA 7(a) rate, which is 2.5% over Prime. This note will be subordinate to any SBA loan.

  4. Retained Equity 
    From the lower-middle market and up, it is common for a buyer to purchase a percentage of the business, and the seller retains equity. For example, a buyer may write a Letter of Intent that states they are purchasing 75% of the business for $20 million, and the buyer is retaining 25% of the equity, valued at $5 million. This ensures the buyer that the business will perform as it did before the sale. Generally, the buyer buys out the seller’s interest in five (5) years. The seller’s role in the business may or may not change.
  5. Earn-Out

    An earn-out is typically a “bonus” to the seller when the buyer hits certain performance benchmarks after closing. For example, a business sells for $1.5 million, and if the business brings in $3.25 million in sales over the next quarter, the buyer will pay the seller an additional $150,000. Again, the buyer wants the seller to have a vested interest in the future performance of the business sold.


Closing will take place 15–30 days past due diligence. Sometimes the buyer, due to the lending, may need additional time added before we can close. This is something we can consider, and we could request an additional escrow deposit for the extension to show good faith. Also, since we cannot give legal advice, we recommend, if you so desire, having an attorney review your closing documents if you want legal representation. The closing attorney is a neutral party and cannot represent you but can explain all the documents.