Choosing an advisor
What are the main steps to selling a privately held business?
The ten steps of a private company sale, what happens in each, what the owner does, and where deals tend to stall.
By Michael D. Rubin, CEO & Founder · September 2026 · 825 words
The main steps to selling a privately held business are: prepare and value the company, hire a representative, package the company confidentially, find and screen buyers, meet them, collect competing letters of intent, choose an offer, get through due diligence, sign the legal documents, and close. Each step has a job for the owner as well as for the advisor.
Below is the sequence, what happens in each step, what you do, and where sales tend to stall.
Before step one: preparation
Preparation starts before any advisor is hired. Put three years of financial statements in order so they reconcile to your tax returns. List owner expenses that run through the company. Make sure key contracts and leases are current and in writing. Think about who would run the company after you, and whether your largest customers deal with you personally or with your team.
Owners with time to spare can use the 12 to 24 months before a sale to fix what buyers will discount; that is what pre-exit consulting is for. Owners who start without preparation can still sell, but the problems they would have fixed become points buyers negotiate on.
The ten steps, and what the owner does in each
| Step | What happens | Your job |
|---|---|---|
| 1. Discovery meeting | The advisor reviews three years of financials and gives an opinion of value | Share the numbers honestly and state your goals |
| 2. Engagement letter | The agreement setting out the advisor's role and fee | Read it with your attorney and understand the fee |
| 3. Marketing package and video | A financial recast, confidential package and HD video are prepared | Supply records and check them for accuracy |
| 4. Buyer screening | Buyers see a blind profile, sign an NDA and prove funds | Keep the sale quiet and keep running the business |
| 5. Buyer and seller meetings | Qualified buyers meet you, often off-site | Tell the company's story and answer questions directly |
| 6. Multiple letters of intent | Buyers submit written offers setting price and main terms | Stay available and let competition work |
| 7. Offers reviewed in person | Your advisor presents every offer | Accept, reject or counter, with your CPA and attorney |
| 8. Due diligence | The buyer verifies financials, contracts, employees and legal matters | Respond quickly and completely |
| 9. Legal documents | The purchase agreement and related documents are drafted | Work through terms with your transaction attorney |
| 10. Closing and funds wired | Documents are signed and money moves | Plan the announcement to staff and customers |
Terms you'll meet along the way
- Recast: financial statements rewritten to show what the company earns for a new owner, adding back personal and one-time costs.
- NDA: a non-disclosure (confidentiality) agreement a buyer signs before learning who you are.
- Letter of intent (LOI): a mostly non-binding offer describing price, structure and key terms, usually with a period of exclusivity while the buyer completes due diligence.
- Due diligence: the buyer's detailed review of your records before closing.
- Purchase agreement: the binding contract, covering price, the statements of fact you make about the company (called representations) and what happens if they prove untrue.
Who is involved at each stage
The cast changes as the sale moves. In the early steps it is mostly you and your advisor, with your CPA supplying records for the recast. Your transaction attorney should review the engagement letter and the NDA, and must be involved before you sign a letter of intent, because the key terms are set there. During due diligence the buyer brings its own accountants and attorneys, and often a lender, and each of them will have questions.
Your managers usually join late, when the buyer needs to meet the people who will stay. Plan who tells them and when, so they hear it from you and not from a rumor.
Where sales stall
The two riskiest stretches are between the first meeting and the LOI, when the owner's expectations meet the market, and between the LOI and closing, when due diligence tests every number. Figures that don't reconcile, a surprise customer loss, or an owner who slows down in answering requests can end a deal or reduce the price.
Two habits help most: keep running the business as if no sale were happening, and answer diligence requests within days rather than weeks. Our long read on what causes a sale to fall apart in due diligence covers the common causes, and our guide to comparing offers covers step seven in depth.
How we run it
These are the steps of our own ten-step process at MDR & Associates. A principal of the firm is in every negotiation. We present every offer to you in person, because we have a fiduciary duty to do so, and we work alongside your own transaction attorney and CPA throughout.
From engagement to funds wired typically takes three to nine months. The fee is 100% performance based, owed only if the company sells. You can begin with a free valuation snapshot before the discovery meeting.
Where this fitsTexas M&A advisors and business brokers →