Is my business marketable?
Is your business ready to be sold? Find out when the time is right, what criteria your business should meet, what documents you need to prepare, and how to determine a realistic asking price.
1 When is the right time?
The timing of the sale is one of the most important decisions in the entire process. It affects not only the price, but also how smoothly the transfer goes and how many prospective buyers express interest.
Optimal Times to Sell
The company is performing well: Stable or growing revenue and earnings show buyers that the business model works
Growth potential is evident: Buyers are looking for companies with a future, not just a past
You’re not under pressure: When you sell from a position of strength, you negotiate better
Suboptimal times to sell
Under financial pressure: Declining revenue or earnings significantly drive down the price
Personal pressure: Burnout or health issues lead to hasty decisions
Without preparation: An unprepared sale costs time and money and leads to avoidable complications
Some sales processes don’t begin with a conscious decision, but rather with an unexpected inquiry from a buyer. A prospective buyer reaches out—perhaps through an advisor, perhaps directly—and makes an offer or expresses interest in purchasing.
In such cases, it’s important not to negotiate exclusively with this one prospective buyer. If you speak only with one buyer, there’s no competition, and without competition, there’s no price pressure to drive a market-based valuation.
Our recommendation: Use the inquiry as an opportunity to work with a sales consultant to set up a structured and competitive sales process. Having multiple prospective buyers at the table ensures that you achieve your company’s actual market value—not just the price a single buyer is willing to pay. Through the DUB Advisor Marketplace, you can find specialized M&A advisors for your sales process.
Buyers pay for future potential, not for the past. A profitable company is easier to sell and commands better terms.
2 What makes a company marketable?
The following five criteria are key to determining whether your business is attractive to buyers and can be sold at a good price:
Owner independence: Do processes run smoothly even without you? The more the business depends on you as an individual, the riskier it is for buyers.
Customer concentration: No single customer should account for more than 20% of revenue. A broad customer base reduces risk.
Documented processes: Are there manuals, documented workflows, and clear lines of responsibility? Documentation makes the business transferable.
Sound finances: Up-to-date business performance reports, annual financial statements, and no commingling of personal and business finances. Transparent financials build trust.
Employee stability: Will key personnel remain with the company after the sale? Long notice periods and satisfied employees are a plus.
Willingness to facilitate the transition: Buyers expect you to be available after the sale to ensure a smooth transition, typically for up to six months. This willingness is an absolute prerequisite for a successful sale.
A high degree of dependence on the owner is the most common reason why business sales fail or why the price is driven down significantly.
3 The 5 Most Common Reasons for Selling a Business
There are many reasons why business owners decide to sell their companies. The following five are the most common:
(Age-related) succession: No successor in the family or the desire to retire—by far the most common reason among German small and medium-sized businesses
Strategic realignment: Focus on a different business area or new projects
Health / Personal reasons: No longer have the energy, a new phase of life, or changed priorities
Market opportunity: A good time to realize the value built up, e.g., because the industry is booming
No matter the reason, what's important is that you take an active role in the sale rather than just reacting. Thorough preparation is crucial.
4 Prepare Documentation & Records
A successful sales process stands or falls on professional preparation. Buyers and their advisors expect well-organized documentation. If you’re unprepared in this regard, you’ll lose trust and waste time. Organize the following documents into a clear folder structure.
Company Documents (must be available)
These documents describe your company and will be reviewed by the buyer throughout the process:
Annual financial statements for the last 3–5 years: balance sheet, income statement, notes to the financial statements—ideally prepared by a tax advisor or certified public accountant
Current business analysis (BWA): Shows the current earnings situation. Should be no more than 2–3 months old
Articles of Association / Bylaws: Current version, including all amendments and shareholder resolutions
Employee overview: Number, key positions, age structure, length of service: no names in the early phase
Rental and lease agreements: Location, terms, conditions: important for assessing fixed costs
Key customer contracts: Revenue concentration, contract terms, notice periods (anonymized in the early stages)
Supplier Contracts: Dependencies, exclusivity clauses, terms
Insurance overview: Existing policies (liability, property, D&O, etc.)
Land registry extracts / real estate: If real estate belongs to the company or is relevant to the location
Organizational chart: Organizational structure, responsibilities, and, if applicable, delegation of authority provisions
Transaction documents (prepared during the process)
These documents are prepared specifically for the sales process and determine what information the buyer receives and when:
Anonymous Brief Profile (Teaser): 1–2 pages describing the company without naming it: used for the initial outreach to potential buyers
Non-Disclosure Agreement (NDA): Signed by the buyer before they receive detailed information
Detailed Company Presentation (Exposé / IM): A comprehensive overview of the company, including finances, market, team, and strategy: shared after the NDA is signed
Data Room (virtual): Structured repository of all documents for due diligence: the buyer gains access after signing a letter of intent (LOI in industry jargon)
Allow plenty of time to compile your documents. The time required depends heavily on the existing corporate structure; expect it to take four to eight weeks. Missing or outdated documents are one of the most common reasons for delays in the process. If you retain an M&A advisor, they will assist you in preparing the transaction documents.
5 Do you have a realistic price in mind?
Your company’s marketability doesn’t depend solely on operational preparation. It also hinges on your valuation expectations. Even a well-prepared company can’t be sold if the seller’s price expectations don’t align with the market.
Emotional Value ≠ Market Value: Many business owners overestimate the value of their life’s work. Buyers evaluate based on numbers, not emotions
Know the multiples: There are typical valuation ranges in your industry and size category. Do your research before naming a price
Useadjusted earnings as the basis: Personal expenses, owner’s salary, and one-time costs must be adjusted to determine the actual earnings value
Don’t include a purchase price in the sales documents: Let the buyer make the first offer. This allows the market to determine the price without you scaring off potential buyers by asking for too much or giving away valuation potential by asking for too little
Unrealistic price expectations are one of the most common reasons why sales processes fail, often before serious discussions even begin. Address the issue of valuation early on.
How to realistically estimate the value of your business, what valuation methods are available, and how to develop a marketable asking price → Module 4: What Is My Business Worth?
6 Self-Assessment: Your Readiness to Exit
Answer the following questions honestly. They will help you assess how well your business is prepared for a sale.
- After a proper handover to my successor (up to 6 months), my business can continue to operate without me
- No single customer accounts for more than 20% of my revenue
- My accounting is up to date and clearly separated (personal/business)
- I have current annual financial statements for the past 3 years
- My key employees have employment contracts with an appropriate notice period
- Key business processes are documented or at least can be described
- My lease or rental agreement has at least 3 years remaining or is transferable
- I am prepared to commit to the sales process for 6–12 months
6–8 checkmarks: Your company is well prepared for a sale.
3–5 checkmarks: There’s still work to be done, but this can be improved within a few months.
0–2 checkmarks: Allow at least 12 months for preparation before you begin the sales process.
- Preparation is everything: A well-prepared company sells faster and on better terms
- Independence from the owner: The less the company depends on you, the more valuable it is
- Realistic valuation expectations: Price expectations in line with the market are crucial. Unrealistic expectations are one of the most common reasons for failed sales processes
- Honest self-assessment: The self-assessment helps you identify areas that need improvement before the sale
Answer 5 questions about your company's marketability. All answers must be correct to complete the module.
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