Selling Your Business: Five Things to Settle Before You Go to Market

By Michael D. Rubin, CEO & Founder · Updated September 2026 · 723 words

Before your company goes to market, settle five things: any legal or environmental problems, who has the authority to approve the sale, the terms you will not give up, what happens to the real estate, and the discounts buyers are certain to apply. Each one is far cheaper to deal with before buyers arrive than in the middle of due diligence, when a surprise hands the buyer leverage.

None of this happens overnight. Some items take a few weeks; others, like reducing reliance on one customer, can take a year or more. That is why the owners who sell best usually start early.

1. Clear up legal and environmental problems

Pending lawsuits, unresolved claims from former employees, tax disputes, missing permits and environmental questions are among the fastest ways to lose a buyer or a lender. Buyers cannot price an unknown, so they either walk away or protect themselves with a lower price, a larger holdback of the purchase price or broad promises from you in the purchase agreement.

Settle what can be settled. Where something cannot be resolved before a sale, document it thoroughly, get a professional estimate of the exposure, and disclose it early. If your company operates on land with any history of fuel storage, chemicals or manufacturing, ask your attorney whether an environmental assessment now would answer the questions a buyer's lender will ask later.

2. Confirm who can say yes

A sole owner can sign. A company with partners, a board, family shareholders or outside investors needs the approvals its documents require, and those documents are sometimes out of date or unclear. Have your transaction attorney confirm the vote needed, who has authority to negotiate, whether any owner can block a sale and whether lenders, landlords or key customers must consent to a change of ownership. Discovering a missing consent the week before closing is avoidable.

3. Decide your non-negotiables early

Most terms in a sale can be traded. A few should not be, and you need to know which ones before the first offer arrives. For some owners it is keeping the employees, or the company name, or not signing a long employment agreement. For others it is a minimum amount of cash at closing. State them at the start so buyers who cannot meet them drop out early. Our answer on deal terms that matter beyond the purchase price lists the terms that most often end up mattering.

4. Make a decision about real estate

If you own the building, you have choices: include it in the sale, sell it separately, or keep it and lease it to the buyer. Many buyers, particularly private equity groups, prefer not to own real estate, and bundling it can shrink the pool of buyers or complicate financing. Keeping it and signing a market-rate lease can give you rental income after the sale. Decide your preference, and be prepared to be flexible. The trade-offs are covered in whether real estate should be included in the sale price.

5. Face the discounts buyers will apply

Buyers pay less when a company depends heavily on its owner, has no management layer, relies on a few large customers or operates in a single location or market. These points lower the multiple a buyer applies to earnings, and they are not negotiable away at the table. They can, however, be reduced ahead of time: promote and train a manager, sign longer contracts with major customers, win new accounts to spread revenue, and document how the work gets done. Where time is short, expect the market to price these risks and plan around it rather than fighting it.

Put your team together at the same time: a transaction attorney who handles business sales, a CPA who understands how a sale is taxed, and an M&A advisor to run the process. Each sees different risks, and they work best when they start before the first buyer does.

How MDR & Associates prepares a company

In pre-exit consulting, covering the 12 to 24 months before a sale, the firm works through these five items with you and your advisors, so that when the company goes to market there is nothing for a buyer to discover that you have not already addressed. To see how today's version of your business would be valued, request a free valuation snapshot.

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Questions owners ask next

Can I sell while a lawsuit is still pending?

Sometimes, but it costs you. Buyers usually respond by lowering the price, holding back part of the proceeds until the matter is resolved, or asking you to cover any loss personally. Settling first, where that is sensible, often leaves you with more money overall. Your attorney should weigh the options.

Do I have to sell my building with the business?

No. Owners often keep the property and lease it to the buyer, sell it separately, or include it in the sale. The right choice depends on your plans, the buyer's preferences and financing. Being flexible on this point widens the pool of buyers.