Thinking About Selling?
Here are some tasks business owners should consider completing before going to market to help their
businesses sell.
- Remove any items not included in the sale. That family heirloom portrait behind the counter of Grandfather William, founder of the business, should be removed.
- Remove or repair any non-functioning equipment.
- Prepare an operations manual to show a new owner all the functions of the business, how things are done, the major customers and suppliers, samples of advertising, and any other information that would help a new owner manage and operate the business.
- Take care of any outstanding bills and resolve any legal, tax, or governmental issues.
- Bring your financial statements up to date, and have your accounting professional prepare them for a buyer’s inspection.
- Clean up the business inside and out. Fill the shelves, clean up the inventory, and paint the interior if necessary.
When Is the Best Time to Sell Your Business?
Many experts say that the best time to sell is when the business is better than it’s ever been. This may be good advice, but few follow it. Why sell when business is good? You just suffered through a few not-so-great years and now the experts are telling you to sell? Right or wrong – good or bad – the decision to sell is generally event-driven. For example: declining health, a partnership break-up, personal issues, too much competition, family member elects not to purchase the business, etc. Retirement sounds like a good reason, but it has no time pressure, unless a seller has made the decision to retire at a certain age. Even then, when the seller realizes that he or she will have nothing to do after a sale…the idea loses its appeal.
However, one thing that a seller can do, without creating any pressure about selling or not selling, is to take a bit of time every year and prepare – just in case. This means tying up loose ends. Make sure financial records are current and complete, leases reviewed and renewed if necessary, any litigation resolved if possible, licenses and permits updated, agreements and contracts renewed and updated if necessary. You could call this eliminating the surprises, and you could also call it good business.
By doing this, if a potential sale comes out of nowhere – you’ll be ready.
Confidentiality Agreement – What Is It ?
Confidentiality Agreement – A pact that forbids buyers, sellers, and their agents in a given business deal from disclosing information about the transaction to others.
It is common practice for the seller, or his or her intermediary, to require a prospective buyer to sign a confidentiality agreement, sometimes referred to as a non-disclosure agreement. This is almost always done prior to the seller providing any important or proprietary information to a prospective buyer. The purpose is to protect the seller and his or her business from the buyer disclosing or using any of the information provided by the seller and restricted by the confidentiality agreement.
These agreements, most likely, were originally used so that a prospective buyer wouldn’t tell the world that the business was for sale. Their purpose now covers a multitude of items to protect the seller. A seller’s primary concerns are to insure that a potential buyer doesn’t capitalize on trade secrets, proprietary data or any other information that could essentially harm the selling company. A concern of the prospective buyer may be that similar information or data is already known or is being developed by his or her company. This can mean that both parties have to enter into some discussion of what the confidentiality agreement will cover, unless it is general in nature and non-threatening to the prospective buyer.
A general confidentiality agreement will normally cover the following items:
- A general confidentiality agreement will normally cover the following items:
- The purpose of the agreement – it is assumed that in this case it is to provide information to a prospective acquirer.
- What is confidential and what is not. Obviously, any information that is common knowledge or is in the public realm is not confidential. What information is going to be disclosed? And what information is going to be excluded under the disclosure requirements?
- How will confidential information be handled? For example, will it be marked “confidential,” etc?
- What will be the term of the agreement? Obviously, the seller would like it to be “for life” while the buyer will want a set number of years – for example, two or three years.
- The return of the information will be specified. For example, if the sale were terminated, then all documentation would be returned.
- Remedy for breach or determine what will be the seller’s remedies if the prospective acquirer discloses, or threatens to disclose any information covered by the confidentiality agreement.
- Obviously, the agreement would contain the legal jargon necessary to make it legally enforceable.
One important item that should be included in the confidentiality agreement is a proviso that the acquirer will not hire any key people from the selling firm. This prohibition works both ways: the prospective acquirer agrees not to solicit key people from the seller and will not hire any even if the key people do the approaching. This provision can have a termination date; for example, two years post-closing.
The sale of a company involves the disclosure of important and confidential company information. The selling company is entitled to protection from a potential acquirer using such information to its own advantage.
The confidentiality agreement may need to be more specific and detailed prior to commencing due diligence than a generic one that is used initially to provide general information to a prospective buyer.
Tips on Maintaining Confidentiality
- Use a code word or name for the proposed merger or acquisition.
- Don’t refer to any principal’s names in outside discussions.
- Conversations concerning the merger or acquisition should be held in private.
- Paperwork should be facedown unless being used.
- All documents should be kept under lock and key.
- Important data maintained on the computer should be protected by a password.
- Faxing documents should be done guardedly.
Are You Ready To Sell?
What a “loaded” question you may think, but the reality is that almost no business owner and their business reach the qualifications of “Ready to Sell” without professional assistance from a qualified individual.
Getting your business and yourself, as the business owner “ready to sell”, takes quite a bit of work and preparation. You need to know and work with someone whose sole profession is selling businesses. You know your business better than anyone, but do you know how to get it ready and in its best shape to sell? Most probably not and the worst mistake a business owner can make is try to get both themselves and their business ready to sell and then try to sell it themselves.
Experience has shown us that more often than not, the Seller will spend more time and money trying to sell and take less than the business is actually worth because they skipped the professional assistance they needed to insure the best price. In short, leaving money on the table!
Preparation may range from simply sprucing up your business to preparing all financials in their true earnings condition, knowing what your industry is doing, understanding the tax implications of a sale, how you can gather more dollars for your business beyond the closing, knowing who most probably will be your buyer, the best manner in which to market your business and last, but not least, you certainly want to make sure that you know exactly what your business is worth.
Read MoreQuestions to Ask a Business Broker
What Questions Should You Ask a Business Broker in Indiana?
The short answer: Before you hire a business broker in Indiana, ask how they value your business, how many listings they actually sell, how they protect your confidentiality, what their fee and contract terms are, and how they screen buyers. The right broker will answer all of these in plain language and back it up with a track record. About 80% of businesses listed for sale never close — the broker you choose is one of the biggest factors in which side of that number you land on.
You only sell a business once. For most Indiana owners, it’s the largest financial event of their life. So choosing the wrong broker isn’t a small mistake — it can cost you the deal, or hundreds of thousands of dollars in price.
The problem is that most owners don’t know what to ask. They interview a broker, hear confident answers, and sign. Below are the questions that actually separate a broker who will sell your business from one who will just list it. I’ve sold businesses in Indiana for more than two decades, and these are the same questions I’d want answered if the roles were reversed.
How will you value my business?
This is the most important question, and the answer tells you almost everything.
A good broker doesn’t pull a number out of the air or just multiply your revenue. Most Main Street businesses in Indiana sell for roughly 2 to 3 times their seller’s discretionary earnings (SDE) — but that range moves a lot based on your industry, your customer concentration, your recurring revenue, and how clean your books are.
Ask the broker to walk you through their method. They should talk about recasting your financials, comparing your business to recent sales of similar companies, and giving you a defensible range — not a single magic number designed to win your listing.
The red flag: A broker who quotes a high price in the first meeting. Some brokers “buy” your listing with an inflated valuation, then spend the next six months talking you down to a realistic number. Meanwhile your business sits on the market and goes stale.
At Indiana Equity Brokers, we give every owner a free, no-obligation opinion of value before you sign anything. You should know what your business is worth before you commit to a broker.
What percentage of your listings actually sell?
Anyone can take a listing. Closing it is the hard part.
Industry-wide, only about 1 in 5 businesses listed for sale closes within 12 months. That number isn’t mostly about the market — it’s about pricing, preparation, and how hard the broker works the deal. A broker who closes a high share of their listings is doing something right.
Ask directly: of the businesses you list, what percentage sell? Then ask to see recent closed deals near your size. A broker who sells $20M companies may not be the right fit for a $1.2M service business, and vice versa.
Will you provide references?
Past sellers are your best source of truth. Ask for the names and numbers of owners the broker has actually sold a business for — not just happy quotes on a website.
Also ask for references beyond sellers: a transaction attorney or an SBA lender the broker works with regularly. Buyers in Indiana lean heavily on SBA financing for acquisitions, and a broker who has strong lender relationships will move your deal through underwriting faster. You can see a sample of our recent transactions and client testimonials for the kind of references to look for.
How will you protect my confidentiality?
This is where a lot of sellers get burned. If word gets out that you’re selling, your employees worry about their jobs, your competitors smell blood, and your customers start looking elsewhere. A leak can cost you the value you’re trying to capture.
Ask exactly how the broker keeps your sale quiet. The answer should include a blind business profile that doesn’t name your company, a signed non-disclosure agreement before any buyer sees details, and a screening process before your identity is ever revealed.
This matters enough that we wrote a full breakdown of why confidentiality is essential when selling your business. If a broker is vague here, walk away.
How do you screen and qualify buyers?
Most people who inquire about a business for sale will never buy one. They’re curious, under-funded, or just kicking tires. Your time is valuable, and so is your confidentiality.
A good broker filters hard before a buyer ever talks to you. Ask what their screening looks like. It should cover proof of funds, financing pre-qualification, relevant experience, and a signed NDA. The goal is simple: you should only spend time with buyers who can actually close.
How will you market my business?
“We’ll list it online” is not a marketing plan.
Ask which platforms they use, how many, and what else they do beyond posting a listing. The best deals often come from a broker’s own network of buyers — search funds, private equity groups, strategic buyers, and individuals already looking in your industry. Ask how big that buyer network is and how they’ll reach it.
You should also ask what marketing materials they prepare. A professional package — a confidential information memorandum, recast financials, and a clear growth story — is what separates a business that gets multiple offers from one that gets ignored.
What are your fees and contract terms?
A broker should be completely upfront about how they get paid. Most business brokers work on a commission paid at closing. Watch for large upfront fees with no clear deliverable behind them.
At Indiana Equity Brokers, we charge no upfront fees — we only get paid when you get paid. Also ask about the listing term and how you can exit the agreement. A one-year listing term is standard, but you want to understand the terms before you sign, not after.
How often will you update me?
Selling a business is a months-long process, and silence is stressful. Ask the broker how often you’ll hear from them and how. You want a clear expectation — regular updates on buyer activity, showings, and feedback from the market — so you’re never left wondering what’s happening with the most important sale of your life.
Who exactly will be working on my deal?
At some firms, a senior broker wins your listing and then hands the actual work to a junior associate. Ask who your day-to-day contact will be, and who will be in the room when offers come in. You can meet the people who’d handle your sale on our team page.
Common mistake: choosing a broker on price alone
The biggest mistake I see Indiana owners make is hiring whichever broker quotes the highest number. It feels good. It’s also the easiest promise to break.
A realistic price backed by a broker who knows how to prepare, market, and close will beat an inflated price every time. An overpriced business sits, loses momentum, and often sells for less than it would have at the right price from day one. Choose the broker with the best process and track record — not the biggest opening number.
Frequently Asked Questions
What questions should I ask a business broker before selling my business? Ask how they’ll value your business, what percentage of their listings actually close, how they protect your confidentiality, how they screen buyers, how they market the business, and what their fees and contract terms are. The right broker answers all of these clearly and backs them up with recent closed deals.
How do I know if a business broker is good? Look at their track record, not their pitch. Ask what share of their listings sell, request references from past sellers, and confirm they have experience selling businesses your size and in your industry. A strong broker is upfront about fees, has an active buyer network, and protects your confidentiality from day one.
How much does a business broker charge in Indiana? Most business brokers work on a commission paid at closing, typically a percentage of the sale price, with the rate often higher on smaller Main Street deals. Indiana Equity Brokers charges no upfront fees — we only get paid when your business sells. Always confirm the fee structure and listing term in writing before you sign.
How long does it take to sell a business in Indiana? Most Main Street businesses take about 6 to 12 months to sell, from listing to closing. Clean financials, a realistic asking price, and a broker who screens buyers well can shorten that timeline. About 80% of listed businesses never close at all, so preparation and pricing matter more than speed.
Should I use a business broker or sell my business myself? You can sell on your own, but most owners struggle to value the business correctly, maintain confidentiality, find qualified buyers, and manage due diligence while still running the company. A good broker handles that process, protects your identity, and usually nets you a better price — which is why most successful sales go through one.
Bottom line
The questions above aren’t a formality. They’re how you find out whether a broker will actually sell your business or just list it and hope. Value method, close rate, confidentiality, buyer screening, marketing, and fees — get clear answers on all six before you sign anything.
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