Small businesses are the lifeblood of the American Economy. At any given moment, thousands of companies are listed for sale across the country in dozens of industries. Exactly what goes into the sale of a small business, however, is less understood by many owners.

    This guide aims to educate you – the owner and ultimate seller of assets – on what the process of selling a small business looks like and some of the common misconceptions. While this guide won’t cover everything, it will give you a foundation from which to expand your knowledge and ask the right questions when the time comes.

    Selling A Small Business: The Basics

    Before jumping into the larger topics, it’s important to give some context to this discussion. First, for the purposes of this guide, we will be assuming that ‘small business’ means any ongoing business concern generating between $250,000 and $3,000,000 of net earnings (businesses smaller and larger than this tend to play by different rules). We will also assume that you operate in a viable industry, operate legally, and maintain normal financial records in your business with taxes filed by a licensed accountant.

    This guide isn’t meant to replace any legal advice you may seek in connection with the sale of your business. Rather, it is a meant as a starting point for your exploration. We wrote the guide for you, and have tried to be as comprehensive as possible in this format, but you should always seek legal counsel in consummating a transaction of any significance.

    Lastly, while selling a small business isn’t simple (as this guide will show), its rewards can be immense under the right circumstances. The financial reward of a successful sale, coupled with the knowledge that your business and it’s employees have found a good home, can make the process meaningful and enable you to transition with greater comfort into whatever awaits you in the next stage of your life.

    We’ll begin by exploring some of the common misconceptions between buyers and sellers of small businesses. Let’s get started.

    Read: Common Misconceptions of Buyers and Sellers in a Transaction