A Complete Checklist for Selling a $5M+ Business [2024 Update]


As a middle-market business owner, you probably make a fairly considerable income via day-to-day business profits, but there’s one payday that will trump even your highest profit periods: The day you sell your business and make your exit. 

If your business is regularly making five to ten million dollars in profits, the day you make your exit and claim your company’s worth will likely be the biggest earning event of your life, and as long as it’s maintained properly, the revenue can fuel a comfortable retirement and leave a meaningful legacy for your next of kin. 

However, there are a lot of things that need to be taken into consideration before you make your exit. Doing it at the wrong time, or without taking the proper precautions, can turn the biggest payday of your life into the biggest headache of your life. 

Of course, that’s not optimal after you’ve spent years or even decades building your middle-market business and earning that massive payout. So, we’ve put together this Selling a Business checklist to help you prepare for your exit and make sure the sale of your $5M+ business goes as smoothly as possible

Let’s get started. 

selling a business checklist

1: Consider PPP Loans

Over the last couple of years, there has been a massive change in the business world. With many businesses struggling to stay open throughout the Covid-19 pandemic, PPP loans became a common debt in order to keep employees paid and businesses from going under

If you needed to take out a PPP loan during the Covid-19 pandemic, there are numerous ways that it can affect your exit. After all, the debt doesn’t simply go away. Depending on several factors, it may be passed to the owner, forgiven, or otherwise paid in full. 

Let’s go over some of the things you’ll need to consider regarding PPP loans and middle-market business sales. 

The Type of Sale:

The type of sale route you take will affect how the PPP loan is affected. 

Stock Sale: 

Stock sales between 20% and 50% don’t require you to notify the SBA, and you can choose to pay off the debt or apply for loan forgiveness prior to completing the sale. 

For any sales over 50%, which you’ll likely be doing if you’re making your exit completely, you will need to either pay off the debt in full or file for loan forgiveness. Otherwise, you will need to notify the SBA and get permission to make the sale. 


If you opt to make a merger, you need to file for loan forgiveness AND set up an escrow account to pay the SBA. Otherwise, SBA approval will be needed before you can close the deal. 

Asset Sale: 

If you’re selling your company’s assets in full, you’ll need to file for loan forgiveness and set up an escrow account to avoid gaining SBA approval for the sale. 


As you can see, all of those situations imply that you can avoid SBA approval as long as you can apply for loan forgiveness, set up an escrow account with the PPP balance owed, and successfully meet all requirements to nullify SBA approval. 

If you do not meet those requirements, you will need to involve the SBA in the transaction process. Adding a third party to the sale can create some undesirable circumstances for obvious reasons. 

However, if you didn’t take out any PPP loans, or you’ve either paid them or had them forgiven already, you can forget about the SBA entirely. 

2: Pre-Sale Prep

Now that we’ve gotten a more unique aspect of the current market out of the way, it’s time to look at the more traditional parts of selling a business. First up, you have to prepare your business for sale. 

This process isn’t something you go through in a couple of days and start looking for buyers. It needs to be slowly tackled over the course of at least a couple of years to ensure you’ve done everything possible to raise your company’s value. 

Also read: “Should I Sell My Business?” | Here’s What You Need To Consider 

First, you need to get all of your records and financial documents organized and up to date. One of the first things a potential buyer or evaluator is going to do is carefully go through those records to determine the true value of the company based on cold, hard data. If you don’t have this information organized, it can prolong the process or cost you, potential buyers, entirely, and if it’s not up to date, you might not get the full value of your business when you make the sale. 

Then, it’s important to start reducing dependencies. These are things such as single suppliers. Let’s say your business makes plastic consumer trashcans, and you need five chemicals to make the plastic. Imagine you’re getting those five chemicals from a single supplier. If that supplier is delayed or goes out of business themselves, your entire supply chain is disrupted, and business halts. That’s a dependency. 

To fix that, you want to diversify as much as possible to get rid of any dependencies your company has. Every dependency poses a risk to the buyer, and that lowers the value of your business considerably. 

3: Perform a Self-Assessment

You’ve worked for years to build the value of your business. So, you obviously want to get the most for it when you sell. However, you can’t expect that to happen if you don’t understand your company’s value or the market you’re trying to sell in. That’s what you’ll need to focus on in this phase. 

You can start by assessing your assets, financial capabilities, profit margins, and everything else that affects your business’s earning potential and overall value to get a good idea of the price range you’ll fall into. However, it gets a lot more complicated than that. 

First, as a middle-market business that isn’t publicly listed or in the public eye as much as a billion-dollar corporation, you won’t have all the publicly available information those companies have to fall back on. This makes your research more time-consuming and difficult. 

Then, you have to consider the market. Your buyer will have to pay to finance the deal, and the prices involved in that financing process will be higher or lower depending on a number of factors. The policies of the administration in charge at the time of financing will affect the cost, and the overall state of the market and economy will raise or lower the cost of financing such a high-value transaction. When the buyer pays less for financing, you can get more for your business. If financing is currently expensive to do, your business won’t sell for as much. 

For this reason, it may be better to hold off if the current market isn’t favoring your end of the bargain. Waiting a year or two might lead to a hefty raise in your overall profit compared to selling in a poor market. 

$5M+ business

4: Hiring a Negotiator

The sale of a middle-market business is not a quick and easy process. There are millions on the line, and just determining the value of the company can take a lot of work. Let alone negotiate a deal that you and the buyer are both willing to accept. 

This time-consuming and delicate process isn’t something you want to take on yourself. You’re in a position to sell your company because it’s successful, and if you start devoting all your time to negotiating deals back and forth, that can quickly change; dropping the value of your company and wreaking havoc on it due to a lack of leadership. 

That’s why it’s important for you to hire a negotiator to evaluate the value of your business and handle the deal itself. 

While the negotiator handles the complex and time-consuming negotiation process, you can focus on your company the same way you have since the beginning; maintaining and potentially building its value in the process. 

Of course, you’ll need to find a potential buyer for this process to initiate, too. This is far easier when financing is cheap and you have all your records organized as we mentioned earlier. 

5: Promote Transparency

You have likely made several handshake deals and promises during your time at your business. This can be something as simple as offering your most trusted employee a promotion with a 15% salary increase, implementing a better insurance program for lower-level employees, or any number of things. Assuming your buyer doesn’t replace the staff entirely upon your exit, those promises won’t disappear. Your employees will expect those promises to be upheld, and if you have any business agreements with suppliers or other partners, they will also expect the agreement to be honored. 

These things will become your buyer’s problem for the most part, but there are two reasons you should care: Your integrity and warranty requirements. 

If you complete the transaction without ensuring these prior agreements are known by the buyer, you not only lose credibility with every person affected, but you may be in breach of warranty and risk major financial consequences. 

Take ten minutes to add these things to your transaction memo with the buyer. 

6: Avoid Post-Sale Risks

Buyers want to minimize their risks as much as possible, and sometimes, they’ll try to sneak clauses into a contract that make you take on the company’s risks even when you’re no longer involved. This can include paying for losses they take after the sale, preventing you from working in the same industry for years or even decades via no-compete clauses, and a variety of other legal tricks that let them buy the company with little risk of their own if it suddenly fails. 

Considering the whole point of selling your business is to get rid of the risk and enjoy the fruits of your labor, it’s best to get a lawyer to look over all contracts and negotiate the removal of any such features.

Also read: How to Mentally Prepare to Sell Your Business? | Top 6 Ways

middle market business selling checklist

7: Keep the Sale Quiet

Ethically, you may think it’s obligatory to make it known that you want to sell. After all, you have likely worked very closely with your employees and business partners, and they will be affected by the sale, too. 

However, it’s important to ensure that information is kept between you and the people involved in the transaction. 

From a business perspective, suppliers and partners may get frightened off by the big changes that are coming, and that can greatly affect the price of your business and its ability to operate. 

In terms of your employees, they may pressure you to hold off on selling. After all, the new owner may lay them all off, and their livelihoods are at risk. 

These things can bring about some serious mental stress, but at the end of the day, you built the business, and it’s your right to sell it without everyone involved tanking its value, or pressuring you to stay involved. 

8: Prepare to Move On

This is often one of the most difficult steps for a middle-market business owner. You have all the personable aspects of a small business but with a much higher value. You’ve worked closely with your employees and suppliers, and you likely regard many of them as friends and family. 

When you sell, you will no longer be in a position to make decisions for the company, and that means some things may happen that you aren’t fond of. 

For example, the new owner may immediately replace all of your staff members and save money with new hires. They may sever decades-old supplier partnerships you built through mutual trust and friendship. They may deny raises you promised or completely change the workplace dynamic to something you would have never even thought of doing. 

If you complete the sale, that’s just how it is. You can’t do anything about it. 

Prepare for this moment and make sure you truly want to sell the $5M+ business you’ve worked on for so long. If you do, it’s your right to do so. 

Hire Final Ascent to Guide You Through the Selling Process

Selling your middle-market business is likely the biggest earning event you’ll experience throughout your life. However, as you can see, it’s a complicated process and there’s a lot to consider on your Selling a Business checklist.  

M&A advisors at Final Ascent can help you move through these steps and receive the most for the sale of your business, and can even help you with post-sale management such as ensuring you have a proper plan for your retirement that doesn’t leave you broke in a few years. 
If you’re thinking of selling your business, contact Final Ascent, today.