What Does a Sale Process Look Like?
What Does a Sale Process Look Like?
Selling a business is a multi‑stage journey that begins long before any formal offers or documents arrive. It starts with outreach—either initiated by you or by interested buyers—during which what matters most is alignment of vision and values. Early conversations often feel informal: you exchange stories of how the company was founded, what challenges you’ve overcome, and what you hope for its future. Some buyers will probe financial metrics right away; others—especially search‑fund entrepreneurs—tend to begin with people, culture, and long-term alignment. This approach can be especially reassuring for founders, as it makes the process feel more personal and human. Sellers often say they feel heard, not just priced. That’s especially important given that selling a business is often an emotional milestone, not just a financial one, particularly for those who’ve spent years building their company from the ground up. That is why early alignment matters so much and why the right buyer often stands out early.
Once both sides sense a fit, you move into a structured engagement. Buyers request financial statements, customer data, and operational reports; they conduct management presentations and site visits to validate growth drivers, margins, and institutional knowledge. At this point, you’re still speaking with multiple prospects, but you’re narrowing the field to those who demonstrate not only the capacity to pay your valuation but also the intent to preserve your legacy.
If these deeper discussions proceed smoothly, you and your preferred buyer negotiate headline deal terms and memorialize them in a Letter of Intent (LOI). The LOI marks the end of the “shop” phase and the start of exclusivity, during which the buyer conducts full due diligence, and you pause conversations with other suitors. This phase typically includes legal reviews, customer and employee conversations, and, from the buyer’s side, financing and final approval processes. It’s often a smoother experience when the buyer is a future operator (like a search fund entrepreneur), since they’re already familiar with the business and personally invested in its success.
From LOI through closing, the focus shifts to confirming assumptions, negotiating the definitive agreement, and planning a seamless transition. This process often includes buyer-side financing and legal diligence, both of which are smoother with search fund buyers, who plan to operate and lead the business. It’s also the point where negotiation leverage shifts more toward the buyer, so sellers should feel confident they’ve found the right partner before entering exclusivity.
Key Takeaways
Fit comes first: Early-stage conversations focus on shared values and vision, and many founders prioritize alignment over price when choosing a buyer.
Process builds confidence: Structured diligence, including site visits and management meetings, helps both sides validate the opportunity and build trust.
Exclusivity marks a shift: Signing an LOI marks the start of exclusivity and full diligence, so sellers should enter this phase confident they’ve found the right partner.
