[07·PLAN THE EXIT]

Hand off the shop on your terms.

Valuation, succession structures, seller financing, and the conversation guides for the day you sell, transfer, or close the business. Most of this is national; specific tax and licensing rules vary by state and should be confirmed with a CPA and an attorney before any deal is structured.

Planning

Retirement gap analysis: what do I need from the sale to stop working

Before the seller negotiates price or structure, the prior question is: how much do I actually need from this sale, combined with Social Security and other savings, to live on. This page walks through the math at a working level. It is not financial advice. It is the framework the seller should use in the first conversation with a CPA or a fiduciary financial planner.

Valuation

What is a small trades business actually worth

Trades-business valuation typically combines tangible assets, the customer book, and goodwill. Brokerage data shows most small home-services businesses trade in a multiple of seller's discretionary earnings (SDE).

Structures

Three ways to hand off a trades business

Three common deal structures for handing off a small trades business: internal buyout, external sale, and partial sale with earnout. Each has trade-offs around price, timeline, and continuity.

Internal sale

The internal buyout: financing and structuring a sale to a long-tenured employee

When the buyer is a current employee, the mechanics are different from an outside sale. The buyer rarely has cash for a meaningful down payment. The financing almost always combines buyer equity, seller financing, and an SBA 7(a) loan. This page walks through the 3 ways to structure the deal and where each one fits.

Buyer types

PE rollup, strategic buyer, or independent owner: how the 3 buyer types differ

Outside buyers for a small trades business come in 3 main forms. A private-equity-backed rollup platform. A strategic buyer (a larger company in the same trade). An independent individual buyer using SBA financing. Each pays differently, closes differently, and runs the business differently after close. This page lays out the tradeoffs so sellers can compare offers on the same footing.

Deal structure

Earnouts: tying the last piece of the price to what happens after closing

An earnout is a portion of the purchase price paid after closing, contingent on the business hitting agreed performance targets. Earnouts bridge valuation gaps and keep a seller involved during transition. They also shift risk onto the seller, so the contract terms are where the deal is actually won or lost.

Financing

Seller financing: how it works and what protects the seller

Most small trades-business sales include some form of seller financing. The seller carries a note for part of the price and is paid back over time. Done well, it makes the deal possible. Done poorly, it puts most of the seller's retirement at risk if the buyer defaults.

Preparation

Due diligence: the document file a serious buyer will ask for

Between letter of intent and closing, the buyer's team reviews the financial, legal, operational, and licensing history of the business. Sellers who assemble the file before going to market close faster, field fewer surprises, and hold price through diligence. This is the working checklist.

Handoff

The bookkeeper / spouse handoff checklist

In most small trades businesses, one person, often a spouse or long-tenured bookkeeper, carries operational knowledge that nobody else has written down. The handoff is what makes the rest of the deal stick. This is the checklist of what needs to be documented before close.

Advisors

Finding a business broker who knows the trades

A business broker manages the sale process: valuation, marketing, buyer screening, deal structure, closing. The right broker for a trades business has experience in your sector and works on a fee structure that aligns with the seller's outcome. This page is what to look for, not who to hire.

Advisors

Finding a CPA who knows small business exits

The CPA on the deal models the after-tax outcome of the structure, not just the headline price. In a hypothetical example, the wrong tax structure on a seven-figure sale can move the seller's net by six figures. This page is what to look for in a CPA, not who to hire.

Conversation

How to raise the succession topic with a long-term employee

If the path forward involves an internal buyer, the conversation has to happen before due diligence, before legal, before financing. The risk is that the conversation itself damages the working relationship. Here is how owners typically structure it.