Selling a business is a process, not an event

Some entrepreneurs approach selling their company as if it were a property transaction: set a price, find a buyer, sign, and collect. The reality is radically different. Selling a business is a complex process lasting six to eighteen months with distinct phases.

Phase 1: Preparation (3-12 months before). The phase most entrepreneurs skip and the one with the greatest impact on the final result. It involves cleaning accounts, normalising EBITDA, reducing founder dependency, formalising contracts, resolving contingencies, and documenting key processes.

Phase 2: Strategy definition (1-2 months). Competitive process or bilateral negotiation? Sell 100% or a majority stake? What type of buyer is preferred?

Phase 3: Search and contact (1-3 months). Identifying and contacting potential buyers under confidentiality agreements.

Phase 4: Indicative offers (2-4 weeks). Evaluating non-binding offers not only by price but by buyer credibility, financial capacity, and plan for the company.

Phase 5: Due diligence (2-3 months). The most intense phase, requiring the entrepreneur to provide vast amounts of information while keeping the company running normally.

Phase 6: Negotiation and closing (1-2 months). Negotiating the purchase agreement — price, adjustment mechanisms, warranties, and retention conditions.

Phase 7: Transition (6-12 months post-closing). The founder facilitates the transition. The new owner implements changes. The team adapts.

Process traps

Starting without preparation. Managing alone (a false economy). Negotiating only on price (conditions can have equal or greater economic impact). Neglecting the business during the process.

The entrepreneurs who understand selling as a process obtain better results — in price, conditions, and personal satisfaction — than those who treat it as a one-off transaction.

Dirk Manuel Martens Jimenez Founder, Blue Mountain Capital