If you have never been through selling a business that you own, the tasks can be quite daunting, and the process and timing bewildering.  In this discussion, we will outline the significant tasks, when they occur, and how long they may take.

Business sale step by step

Let’s assume a privately held, middle-market company, not in financial trouble, and capable of following an organized approach to prepare for and market the company to obtain the best market value. In this discussion, we will focus on the typical transaction and process, excluding two other scenarios: selling during financial distress and being targeted by a strategic buyer.

The latter case involves strategic buyers who have extensively researched and may make preemptive offers to avoid an auction, reducing the overall timeline. With decades of experience at Aaron, Bell International, we have observed and managed numerous transactions, each with its unique aspects.

Pre-Marketing Preparation for Selling the Business

While these suggestions are crucial for any business phase, they become even more critical when preparing for a high-value divestiture. The phrase “get your house in order” succinctly captures the essence. During the marketing process, dealing with potential buyers and preparing presentations will require significant attention from you, your key personnel, and your systems. Ideally, these suggestions are already part of your company’s norm, but typically, some areas need attention.

Ensure your financial systems are up to date, well-maintained, and capable of providing historical business information, as well as future budgets and projections. If you have a Board of Directors, keep the minutes and record books up to date. Gather all key contracts in a secure, organized record storage area, including tax returns, as they will likely be requested.

Important note*

Remember, it’s not just about documents, physical housekeeping matters too. Dispose of obsolete inventory and eliminate useless dust collectors in storage areas. A cluttered facility raises questions about your entire inventory.

These tasks should be completed before diving into the core exercise of the divestiture process.

You Are Going to Need Help!

The essential team members for your divestiture process include your accountant, tax advisor, attorney, and investment banker. While most businesses already engage the first three, the fourth participant is often missing initially. However, before diving into the battle, you may need to seek additional expertise.

Selecting your investment banker early on can assist with various activities. Your chosen banker must possess the necessary licenses and accreditations to handle your transaction. Look for a banker experienced with businesses of your size and comfortable dealing with companies and investors similar to those you expect to encounter. While industry expertise is valuable, remember that you are likely the expert in your own industry within your team.

Instead, prioritize finding an investment banker who understands the interests of potential buyers. Although your mid-market company may not attract big Wall Street names, there are reputable investment bankers across the country who specialize in serving companies of your size. Interview potential firms, review their track records, and speak with their references. While a personal friendship is not necessary, aim for a relationship based on mutual respect, honesty, and trust.

Important team members

Evaluate your other team members, including your lawyer, accountant, and tax advisor. Ideally, your lawyer and tax advisor should have significant experience in Mergers and Acquisitions (M&A). Inexperienced legal counsel may not know what is reasonable in terms of requests and warranties for you and the acquirer. Transaction documents focus on minimizing risks and protecting assets post-deal, making experienced counsel crucial. Additionally, tax exposure and planning opportunities in major company transactions carry significant financial implications. If your existing professionals lack strong credentials in this area, consider seeking special counsel for the transaction. While transaction experience is slightly less critical for your outside accountant, their responsiveness, well-prepared information, and ability to handle the extra workload are essential for their performance.

Plan for approximately a month of dedicated time to select and refine your professional team, assuming you proceed with purpose.

Data Collection and Draft Confidential Information Memorandum

The transaction process begins with data collection and the preparation of an information offering memo, known as the CIM or Confidential Information Memorandum. This document, drafted by your investment bank, provides a summary of the business, its history, operations, market, competitive position, and other pertinent details. It offers prospective buyers the necessary insights to evaluate their interest in purchasing the company.

During the CIM creation, investment bankers often prepare a teaser, a condensed summary of the opportunity without revealing company identity or confidential information. This teaser is circulated among potential buyers to gauge their interest in the Process and Timing of selling a business. The CIM should be crafted to provide sufficient data for analysis while also encouraging prospects to ask questions. This establishes a dialogue that allows the banker to assess their interest and identify critical issues for their participation in the bidding process.

Concurrently, the investment banker will summarize relevant company data, including a master equipment list, employee lists, and other essential information required for analysis by each prospective buyer.

Estimated time for completion: four weeks.


During CIM preparation, your banker surveys the market to identify potential investors. Once the CIM is ready, active marketing begins. The goal is to create a competitive bidding environment with strategic and financial buyers. Based on initial interest, confidentiality agreements are signed. Once a qualified buyer submits a signed CA, they are granted access to the “data room.”

Traditionally, a data room was a secure facility where buyer-accessible seller documents were managed by an attendant. Nowadays, a controlled web portal serves the same purpose. Interested investors submit conditional offers called term sheets or letters of intent (LOI) by a specified deadline. A limited number of prospects are chosen based on fit and factors like price, culture, and opportunities. The bidder pool is narrowed down as the Process and Timing of selling a business advances.

Estimated Time for completion: 6 to 12 weeks.

Transaction Management

Once the potential buyer list has been narrowed down to a few candidates, the transaction enters a more intense phase as all parties realize they are approaching the finish line. M&A is a competitive endeavor, and buyers who reach this stage typically have a strong desire to close the deal. Conversations become focused on discussing actual deal terms and addressing potential concerns. Negotiations ensue, leading to revisions and expansions of the term sheets or LOIs. Your investment banker plays a delicate role, striving to secure favorable terms for you while keeping all parties engaged in the Process and Timing of selling a business.

With your banker’s guidance, you’ll assess and accept the offer delivering the most value in the Process and Timing of selling a business. The offer will have contingencies or “outs” for withdrawal. Both parties negotiate “outs” to preserve their options and limit the other party’s choices. It is common for one of the buyer’s “outs” to be contingent on satisfactory results from their due diligence procedures.

Estimated Time for completion: 2 to 4 weeks.

Due Diligence

During the transaction management phase, the buyer typically has a due diligence period, usually lasting around 30 days. This allows prospective buyers to thoroughly evaluate the business they intend to acquire in the Process and Timing of selling a business. Buyers often enlist the expertise of independent professionals and their own staff to conduct comprehensive analyses of various aspects of the business. The purpose of due diligence is to uncover any significant issues or concerns related to the business.

The focus of due diligence procedures is usually weighed towards areas that the buyer considers crucial, such as financial performance, customer contracts, key personnel, legal matters, and intellectual property. The seller should be prepared to provide access to documents, key personnel, and necessary information to facilitate a smooth due diligence process. Delays in due diligence can create uncertainty and negatively impact the Process and Timing of selling a business.

Estimated Time for completion: 30 days.

Negotiating and Closing

Assuming the due diligence process goes smoothly and there are no significant issues, the final stage involves negotiating and executing the definitive purchase agreement. This agreement outlines the final terms and conditions of the sale, including the purchase price, payment terms, representations and warranties, indemnification provisions, and other relevant details. The negotiation and drafting of the purchase agreement can take several weeks, as legal teams from both sides work to protect their respective interests and ensure a fair and comprehensive agreement.

Once the purchase agreement is finalized, the closing process begins. This involves the exchange of funds, transfer of ownership, and fulfillment of any remaining conditions outlined in the agreement. Closing typically requires coordination among various parties, including attorneys, accountants, lenders, and other professionals involved in the Process and Timing of selling a business.

Estimated Time for completion: 4 to 8 weeks.

Post-Closing Integration

After the closing, there is often a period of post-closing integration, where the buyer takes over the operations of the acquired business and implements any necessary changes or integration plans. This phase varies depending on the nature of the transaction and the buyer’s strategic objectives. It may involve integrating systems, processes, and personnel, as well as implementing new strategies or restructuring initiatives.

The length of the post-closing integration period can vary significantly, ranging from a few months to several years. During this phase, both the buyer and the seller work together to ensure a smooth transition and maximize the potential value of the transaction.


The Process and Timing of selling a business can be complex and time-consuming, requiring careful planning, preparation, and execution. Engaging experienced professionals, such as investment bankers, attorneys, and accountants, can significantly help navigate the intricacies of the process and increase the chances of achieving a successful sale.

While the timeline provided in this article serves as a general guide, it is important to note that each transaction is unique and can vary in duration. Factors such as market conditions, the complexity of the business, and the negotiation dynamics between the parties involved can influence the overall timing. Therefore, it is crucial to consult with your professional team and adapt the process according to your specific circumstances.

By following a structured approach and collaborating with a dedicated team, you can maximize the potential of your business sale and achieve your desired outcomes in the Process and Timing of selling a business.

More information on the selling process can be found: here.