7 Important Questions to Ask Yourself When Selling a Business

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By Michael D. Rubin, CEO & Founder · Updated September 2026 · 838 words

When selling a business, ask yourself exactly what is for sale, which assets produce the earnings, what is proprietary, what your competitive advantage is, where growth will come from, what agreements are in place, and what working capital the company needs. These questions define the package a buyer is paying for. Answering them before the first conversation prevents confusion, protects value and avoids late surprises in due diligence.

The simplest approach is to look at your company as if you were the buyer: what would you want to know, and what would you worry about? The table summarizes the seven questions, and the sections after it explain what to prepare for each.

The seven questions at a glance

Question	Why a buyer asks	What to prepare
1. What exactly is for sale?	To know what the price covers	A list of included and excluded assets
2. Which assets earn money?	To separate operating assets from extras	Asset list tied to revenue
3. What is proprietary?	To value what competitors cannot copy	Documentation of IP, software, processes
4. What is the competitive advantage?	To judge whether earnings will last	Evidence: customers, margins, reputation
5. Where will growth come from?	To justify the price and plan ahead	A realistic, specific growth outline
6. What agreements are in place?	To confirm people and contracts stay	Employee, customer and supplier agreements
7. What working capital does it need?	To set the amount left at closing	Monthly balance sheets and trends

1 and 2. Define the package

Owners often hold assets that are not needed to run the business: real estate owned in a separate entity, a vehicle used personally, spare equipment, excess cash. Decide what is included. Real estate in particular can be sold with the business, sold separately, or kept and leased to the buyer, and each choice affects price and financing. Our article on whether real estate should be included in the sale price covers the tradeoffs.

Then tie the operating assets to the earnings. Buyers pay for assets that produce cash flow. Idle equipment rarely adds much to the price and may be better sold beforehand. Also list assets that belong to you personally but are used by the business, such as a building, a vehicle or a trademark held in your own name, and decide how each will be handled.

3 and 4. Know what makes the company hard to copy

Proprietary assets can include patents and trademarks, custom software, formulas, tooling, processes and specialized know-how held by your team. Make sure the company actually owns them, that they are documented, and that employees and contractors who created them have signed the right agreements. Buyers may bring in specialists to assess them.

Your competitive advantage is the reason customers choose you: a niche, a location, quality, speed, certifications or relationships. State it plainly and back it with evidence, such as long-term customers, steady margins or a strong reputation. A claimed advantage without proof is treated as marketing. Ask a few long-standing customers, informally, why they buy from you; the answers are often more persuasive than anything you would write yourself.

5 and 6. Growth and agreements

Buyers want to see where the next revenue will come from: new services, territories, customers or pricing. You do not need a detailed business plan, but a specific, realistic outline helps buyers justify their price. If growth is limited, say so; the price will reflect it either way. Buyers pay for what you have achieved rather than for what they might achieve, so tie growth ideas to evidence, such as a recently added service that is already selling.

Agreements decide whether what the buyer is paying for will stay. Review employment agreements with key people, confidentiality and non-compete terms where they apply, customer contracts and supplier terms, and whether any require consent to transfer. Your transaction attorney should review them before a buyer does.

7. Understand your working capital

Working capital is current assets such as receivables and inventory minus current liabilities such as payables. Buyers expect a normal level of it to remain in the business at closing, often set as a target or peg in the purchase agreement. If you do not understand your own seasonal swings, you may leave money on the table. See how working capital affects the purchase price.

Clear, consistent monthly financial reporting makes this easier to agree on and signals a well-run company. If inventory or receivables swing with the seasons, show twelve months of history so the target is set on a fair average rather than a single month.

How we help owners define what they are selling

At MDR & Associates, preparing the marketing package and financial recast forces these questions early, so they are settled before buyers arrive. A business valuation shows which assets and strengths drive the number. Our advisors review three years of financials in the free discovery meeting, which is where most of these questions first come up. To start, request a free valuation snapshot for a confidential range.

Where this fitsSell your business in Texas →

Questions owners ask next

Can I keep some assets out of the sale?

Yes. Owners often keep real estate, vehicles or personal items, and sometimes excess cash. Agree on the list early and state it clearly in the letter of intent, so the buyer's price and the purchase agreement reflect exactly what is included and nothing is disputed at closing.

What if my company does not own its key software or designs?

Fix it before selling if possible. If a contractor or employee created them without an agreement assigning ownership to the company, a buyer may see a gap. Your attorney can advise on putting assignments or licenses in place, which is far easier before diligence than during it.