Exit Plan for Success: 7 Milestones for Selling Your Business

Thinking of selling but not sure what to expect from the process? Stop fretting and get moving with these 7 milestones.

This post was first published on my Medium blog—follow me there for the most up-to-date entries!

After years of hard work building your business, you’re ready to sell it. But maybe you feel like you don’t know enough about the process. That’s exactly where I found myself last year. I’m not one to jump into an unfamiliar process with both feet. The process of selling looked to me like one big mysterious, monumental goal to be achieved. I finally realized I needed to view that outcome in chunks, using my project management tool. I needed a framework — I needed milestones for selling my business.

Any owner planning to exit their small business or microbusiness could use these milestones. Your pace may vary — you might accomplish all 7 quickly and exit within the quarter, or you can spread them out over the course of several quarters, or years. Whether you’re inputting these milestones and tasks into project management software like I did, writing them on sticky notes on your wall, or just trying to get the process straight in your mind, read on to find 7 milestones for selling your business.

1. Preparation phase

Selling your business is fundamentally like selling any other asset, whether it’s stock, real estate, or a car. At its core, the process involves determining the asset’s value, identifying potential buyers, and managing the transfer of ownership while minimizing legal, financial, and personal risks. The preparation milestone for selling your business is about making sure everything is ready for the sale.

Before proceeding, take time to clarify the key definitions in each of these areas, and then create a checklist of all the necessary documents. This is a learning process, so treat it as such. Consider reading or listening to at least one solid learning resource to deepen your understanding.

As you are identifying the milestones of selling your business and setting up the related tasks, remember it probably all boils down to these six questions:

Why are you selling? (This is critical. Do not move on until you truly understand your “why.” Read my suggestions for exploring your “why.”)
Who is qualified and interested in buying?
What exactly are you selling? (“Business” is too vague — identify what will be included and excluded in the sale; this may be critical for the purchase agreement and the tax implications, too.)
Where will you find the professionals who can assist you? Within your network? On LinkedIn? Somewhere else?
When is the optimal time to sell?
How much is your business worth? (Consider both financial value and intangible assets like goodwill.)

Whether you’re selling a car, a house, or an entire business, having a solid understanding of these basics can significantly improve your chances of a successful sale.

Once you’ve established your goals and gathered the essential documents, it’s time to move into the next phase: preparing your business for sale in a way that attracts the right buyers and protects your interests.

2. Determining the right time

There’s no perfect time to sell. You’ll need to define that for yourself. However, read my post on the time to sell, and consider a few key steps to help make that determination:

Review and evaluate your business financials.
Assess market conditions in your industry.
Recognize and embrace your personal goals.
Get a business valuation.
Consult with experts.

3. Marketing the sale

Once you’ve determined that the timing is right, the next milestone for selling your business is effectively marketing to attract qualified buyers. Your aim is to make a significant difference in both the speed and success of the transaction. Here are the key steps to take:

Create a sales package: Develop a comprehensive document that highlights your business’s strengths, financials, operations, and growth potential. This may include an overview or introductory materials. Note that the term sales package is often used interchangeably with Confidential Information Memorandum (CIM), though the CIM is typically a more detailed, confidential document that is shared with serious buyers after an NDA is signed.
Have confidentiality agreements: Ensure that potential buyers sign non-disclosure agreements (NDAs) before receiving sensitive business information. These agreements are usually signed before the CIM is shared. In some cases, the NDA may be part of the Letter of Intent (LOI), but it is generally issued separately at an earlier stage, before providing access to more detailed documents like the CIM.
Market the sale: Promote the sale of your business through brokers, online platforms, or your own network. This will help you reach a broader pool of potential buyers.

4. Negotiation and offer stage

After marketing your business and attracting serious buyers, the next milestone for selling your business is negotiation. This is where the terms of the deal are solidified and both parties move closer to agreement. To ensure a smooth and successful negotiation, here are the key steps to follow:

Screening potential buyers: Conduct interviews or meetings with interested buyers to assess their qualifications and financial capacity.
Using a Letter of Intent (LOI): Once a buyer is found, negotiate and sign an LOI that outlines the basic terms of the deal (price, timeline, conditions) and may include the non-disclosure.
Due diligence: Due diligence is an in-depth review of your business’s financials, operations, legal standing, and other critical factors. Typically, and also in my own experience, the buyer will compile a list of what’s needed for due diligence and request supporting documents and explanations from the seller. (Before closing, consider having the buyer confirm, in writing, having received each of the documents listed on the due diligence list, and being satisfied with each of the explanations you provided.) In anticipation of these, you could start gathering relevant documents and reports.
Negotiation of final terms: Based on the due diligence findings, there may be price adjustments or changes in terms before finalizing the deal.

5. Finalizing the deal

Once the terms have been negotiated, it’s time to focus on the final steps that ensure a smooth and legally sound transaction. These actions will help you close the deal and complete the sale efficiently:

Purchase agreement: Work with your lawyer to draft a comprehensive sales agreement that outlines the final terms and conditions, including payment structure, warranties, and non-compete clauses.
Tax considerations: Consult with a tax advisor to understand the tax implications of the sale, including capital gains taxes and any other potential liabilities. Be sure to specify if you’re selling certain assets (and if so, what) or the entire business.
Securing financing: If the buyer is financing the deal (via a loan or other financing options), ensure that they can secure the necessary funds.
Escrow arrangements: In some deals, an escrow account may be set up to hold part of the sale price until certain conditions (like post-sale performance) are met.

6. Transition phase

With the deal closed, shift your focus to the post-sale transition. This milestone for selling your business ensures a smooth handover, allowing both the seller and the new owner to maintain business continuity and address any outstanding matters. Here are the key steps to consider:

Transition plan: Develop a plan for transitioning ownership to the buyer. This might include training, introductions to key clients, suppliers, and employees, and offering ongoing support for a specified period. (Do not confuse “transition” with “transaction.”)
Employee communication: Notify employees about the sale, following appropriate legal requirements and managing morale during the transition. Before you do so, consider the right time to tell your staff, and make an outline of what you’ll tell them.
Finalize payments: Ensure that all payments (including any final balance, seller financing, or earn-outs) are completed as agreed.
Close the deal: Complete all final paperwork, transfer ownership, and close the deal.

7. Post-sale considerations

Once the transition phase is complete, attention turns to the final post-sale steps. These actions help wrap up loose ends, ensure adherence to the terms of the agreement, and set you and the buyer up for long-term success after the sale is officially finalized. Here’s what to focus on:

Tax filing and reporting: After the sale, work with your accountant to file the necessary tax documents reflecting the sale and any capital gains taxes due. Work with a professional on this; the details depend on which state you’re in, whether it was sale of assets or sale of the entire business, whether you have employees, and more.
Follow up with buyer: Depending on your agreement, stay in touch with the buyer during the post-sale transition period to ensure the business continues running smoothly.
Celebrate the exit: Selling a business is a major milestone — take time to reflect and celebrate the success of your entrepreneurial journey.

Milestones for selling your business

If you’re in the same place I was when I started thinking about selling my business, the process might look murky and overwhelming. But every problem becomes more manageable when broken down into milestones. You may need to tweak some of my suggestions to fit your business’s situation, but the above framework should give you a starting point to establish the milestones for selling your business.

Which of those milestones feels most challenging for you?