1. Is your business growing?

a. You consistently make enough money to pay your employees and your expenses, but there isn't much left over to reinvest in the business.

b. You're growing now more than ever, but the thought of expansion is a task you'd rather not take on.

c. You recently invested in a new location, expanding your operation to handle the growth of your business.

2. Are economic and industry trends in your favor?

a. Your market is in a lull and your company is feeling the weight of the economic recession.

b. Your industry is in an upswing and you see growth for your company on the horizon.

c. According to the news there's a recession going on, but everyone in your market, including you, is making a lot of money!

3. Can your business run without of you?

a. I hope so, but I haven't left the office for more than three days since I founded it! Why do you think I'm trying to get out of here?

b. I hate to say it but yes. Of course I'd have to stick around a bit before the new owner was acclimated, but this place pretty much runs itself.

c. I've strategically kept a few integral duties out of the hands of my co-works. Otherwise I wouldn't be the boss!

4. Have you audited your finances for at least last three years?

a. No, because it's unnecessary, expensive, and if I ever find a potential buyer I'll be more than willing to retroactively audit a few years of my finances to ensure the integrity of my business.

b. Even though it's expensive and you can always audit your finances retroactively, my business partner forces me to get ours audited every year.

c. I decided we should start getting our finances audited about a year ago. Hopefully this will comfort prospective buyers who may otherwise be wary of my business's long term health.

5. Have you maximized your EBITDA?

a. What's my EBITDA?

b. Although it is known that increasing my Earnings Before Interest, Taxes, Depreciation and Amortization is just a way to improve the appearance rather than the health of my business, we're hoping it will make my company more attractive to prospective buyers.

c. We still have a few unnecessary expenditures that could be scratched from my EBITDA, but every business owner has those and if we remove them we will risk looking like we're trying to make our business look better than it really is.

6. How many prospective buyers are interested in your business?

a. We've received an unsolicited offer for more than I could ever dream my business would be worth.

b. We plan to keep a few buyers on hand for leverage at the deal table in case the agreement falls through late in the game.

c. We have established a good rapport with one buyer in particular and do not want to scare away a good deal by entertaining negotiations with companies that make unsolicited offers.

7. Have you found a trustworthy buyer?

a. I'm not sure why my prospective buyer has a history of taking such a long time to close deals, but her business is very successful and well known.

b. I'm very familiar with my prospective buyer's true wheelers and dealers and I will even ask a few of my former competitors, who also sold their business to this company, about any complications they had along the way.

c. My prospective buyer's corporate culture seems to be very similar to ours but I have always been careful to maintain a certain distance from its board members.

8. Do you need to sell?

a. Yes! I'm so bored with what I do; something has to change!

b. No, in fact, I'm approaching this sale with a certain level of indifference. To be honest, I'm still keeping a close watch on my business and if this falls through I will definitely have wasted some time and money, but I'll still have a successful business.

c. I will only begin due process once I am sure I am going to sell my business. Otherwise I run the risk of wasting time and money for nothing.

9. Are your co-owners and principal stockholders on-board?

a. No, but I own a controlling share of the company and can do what I want with it.

b. Yes, I shared my thoughts with my primary stockholders and upper level management and they are aware of the possible consequences of my actions.

c. No, I did not talk about selling the business with anyone inside the company because it will shake my upper level management's confidence in the business and cause them to lose sight of their work.

10. How emotionally attached are you to your business?

a. I don't work for the money; I work because I like what I do.

b. I've made enough money to support my family through whatever I choose to do in the future. But as for this business, I think I'd like to move on.

c. The money I am making with this business is a big plus, but if I could free myself up to try something new, I think I'd be a lot happier.


a. If you answered mostly (a), you should probably hold onto your business. First and foremost, you're likely to get the best price for your business when your industry is hot and financial markets are doing well. Even if you've received one great offer, taking the first thing that comes may not be a good idea. The majority of your board should have the ability to vet several offers and should agree when it's time to sell. If you're not in the red and you're simply bored with what you do, it's probably time to innovate. Consider developing a "recession proof" plan for you business, so sales won't wane during economic downturns. This will make your everyday life more interesting, and perhaps help you mature your business by delegating more integral duties to the employees who might someday fill your shoes, allowing you to move on or retire.

b. If you answered mostly (b), it could be a good time to sell. Conditions in the economy and industry seem ideal and you've gone the extra mile to make your business attractive to prospective buyers. Just remember the ball is in your court at the negotiating table, so seriously weigh the pros and cons of a few different offers. You're more liable to get the price you want if you maintain a level-headed attitude toward selling or holding. Don't refrain from pulling out of deal that doesn't feel right. If worse comes to worse and you decide not to sell you'll still have a successful business on your hands.

c. If you answered mostly (c), it's probably in your best interest to wait another year or two before selling your business. While you're waiting for an upswing in the larger economy, continue to implement under-used or newly acquired physical capital. Better to realize the full potential of your current operation than to tack the potential of unused equipment or locations onto your business's price tag. Continuing to audit your company's financials is a good idea: credible buyers will want to look at least three years of audited finances before beginning a more serious analysis of your company. Maximizing your EBITDA by increasing revenues and decreasing unnecessary expenditures will hopefully win you a better offer at the table, especially after you negotiate with a few different prospective buyers.

For more information on this topic, check out these organizations:

Small Business Association

The National Federation of Independent Business