Get the Numbers Ready First
Buyers and their lenders start with three years of tax returns and financial statements. If the two don't match, or the books mix personal and business spending, the first months of a sale go to cleanup instead of marketing.
A broker recasts your statements to show true cash flow. That means adding back your own pay and perks, one time expenses and anything else a new owner wouldn't carry. Each addback needs a paper trail.
Start this a year before you want to sell if you can. Clean books are the single cheapest way to raise your price.
Decide What You Are Selling
Most companies under about $2 million sell as asset sales. The buyer takes the equipment, client relationships, name and goodwill, and your entity keeps its cash and usually its debts.
Larger deals, and companies with contracts that can't easily move, more often sell as a sale of the shares or membership interests.
That choice changes the taxes, the paperwork and what the buyer takes on, so make it with your CPA and attorney early.
Marketing Without Telling Everyone
Clients, staff and competitors in this area talk. A broker markets the company with a blind profile that describes the industry, size and earnings without naming you.
Interested buyers sign a confidentiality agreement and show they can pay before they learn the name. Only then do they see the full package and meet you.
Offers, Diligence and Closing
A serious buyer puts its offer in a letter of intent: price, how it is paid, what is included and how long diligence will take. Many deals include a seller note or an earnout for part of the price.
Diligence usually takes 60 to 90 days. Buyers check every number, contract and license. Lenders using SBA 7(a) loans, which go up to $5 million, run their own review.
From hiring a broker to closing, seven to nine months is typical for a well prepared company.
The DC Part
A few District rules shape the closing. The buyer must send the Office of Tax and Revenue a bulk sale notice before paying for business assets. Buyers often ask for your Certificate of Clean Hands, which shows your DC tax accounts are in order.
Unincorporated companies file a final D-30, and the gain on the sale is now part of it. Your employees' unemployment account can pass to the buyer through the Department of Employment Services.
DC also bans most employee noncompetes, but a seller's promise not to compete with the company they sold is still allowed. Expect the buyer to ask for one.
Maryland and Virginia Companies
If your company is based in the suburbs, your state's rules apply instead of DC's. The selling steps are the same; the tax offices and filings differ. Our locations page covers the nearby counties and cities.
Want a starting point? Use the request form or call (202) 555-0174.