Selling a Business: Process, Value and the Right Buyer

You usually sell a business only once — and whether it succeeds is decided long before the negotiating table. Whether sole proprietorship, trade business or limited company: the route follows the same basic steps, but the legal form shapes how it is sold and what happens for tax.

This article works through the core questions: How does the sale work? What is your business worth? How does legal form influence the sale? And how do you find the right buyer? Each question is deepened in the linked articles.

How does the sale of a business work?

A business sale runs in phases: preparation, valuation, buyer approach, due diligence, negotiation and closing. The visible part — negotiation and signing — is short; the preparation before it is long and decides the price. On the market the process from buyer approach to signing usually takes six to twelve months.

The full process is described in “The Process of a Company Sale”; the framework for owners in the “Selling a Company” guide.

What is my business worth?

The value of a business depends on earnings power, industry, growth and dependence on the owner — and on what a buyer is strategically willing to pay. A sound answer combines several valuation methods rather than relying on a single formula. The less a business depends on the owner as a person, the higher the value usually is.

The overview of methods is given in “What Is My Company Worth?”; where your industry stands on the EBITDA multiples is a good reality check.

How does legal form influence the sale?

The legal form decides how the sale is structured. A sole proprietorship or trade business is sold via its assets (asset deal); the trade licence does not pass automatically, and the buyer needs their own. A limited company can additionally be sold via its shares (share deal), which handles liability and tax differently.

The differences are explained in “Asset Deal or Share Deal?”. The peculiarities by legal form are deepened in “Selling a Sole Proprietorship” and “Selling a GmbH”.

How do I find the right buyer?

Buyers are mostly strategic acquirers from the industry or financial investors — and the highest offer price is not automatically the best offer. What matters is how much flows when and under what conditions. Value is protected not by the first figure but by a structured process with several interested parties, in which competition arises.

How the buyer search works is shown in “How Do I Find the Right Buyer?”; the difference a guided process makes is set out in “M&A Adviser”.

Sell a business or hand it over?

Not every exit is a sale. Those who pass the business to family or employees speak more of a handover; those who sell to an external acquirer, of a sale. Both routes require preparation and a realistic valuation. If no buyer is found, closure remains in the worst case.

The handover perspective is deepened in “Business Handover”; when closure or sale is worthwhile is set out in “Closure or Sale?”.

The most common mistake — and how guidance helps

The costliest mistake is to start too late and alone: without preparation, without a realistic valuation, with a single interested party. An independent M&A adviser provides structure, discretion and competition — and thereby protects value and negotiating position. The legal and tax structuring belongs additionally with a lawyer and tax adviser.

If you are thinking about succession, sale or finding an investor: talk confidentially with IGCP Capital Partners — independent and discreet. → igcp.at

Frequently asked questions

How do I sell my business?

In phases: preparation, valuation, buyer approach, due diligence, negotiation and closing. The biggest lever is preparation — it decides price and negotiating position. A structured process with several interested parties protects the value. Plan for six to twelve months for the process on the market.

What is my business worth?

It depends on earnings power, industry, growth and dependence on the owner — and on what a buyer is strategically willing to pay. A sound answer combines several valuation methods and checks plausibility, rather than relying on a single formula.

Do I sell a business as an asset deal or a share deal?

A sole proprietorship or trade business is sold via its assets (asset deal). A limited company can additionally be sold via its shares (share deal). The choice affects liability, tax and the transfer of contracts and belongs early with a tax adviser and lawyer.

How long does it take to sell a business?

On the market usually six to twelve months from buyer approach to signing; with an experienced adviser, shorter runs of three to six months are possible. The preparation before it should start considerably earlier.