Seller guide No. 13
Seller guide No. 13
If your business still earns you a steady living, try to sell it before you close it, because closing brings used-equipment prices while a sale is priced on what the business earns. Close if no buyer comes in time or the business no longer earns, and start the sale months before the date you would lock the door.
Last updated: October 25, 2026
Paula Lindqvist is 59. She has run Lindqvist Bakery in Pine Hollow for twenty-three years. She starts at four, sells out of rye by ten, and her knees have started to argue with the stairs to the flour room.
Her plan was simple. Bake through Easter, put a sign in the window, sell the ovens and give the regulars a hug. The bakery earns her about what a good job would. Who would pay for that?
Paula, her bakery, her baker Mateo and Pine Hollow are made up, and so are their numbers. The way she works out the answer is how an owner can test close or sell before choosing.
Chapter 1
Example only, with made-up numbers. Paula's tax returns show the bakery pays her about $62,000 a year, once her own wages and a few personal costs are added back. Sales run about $310,000.
If she closes, a used-equipment dealer might pay $21,000 for the deck oven, the mixer and the cases. Then the bills come. Her lease has fourteen months left.
Closing is not free. The IRS expects a final return for the year a business closes, and owners with staff file final payroll returns and hand out W-2s. The SBA lists canceling permits and licenses and filing dissolution papers with the state.
Everything that is not equipment sells for nothing when you close: the regulars, the phone number, the name on the window and the recipes. Those are exactly the things a buyer pays for.
If you want a rough number for your own business before you read on, the free business value calculator takes your trade and two figures from your return and gives you a range in about a minute.
| Line | Amount |
|---|---|
| Ovens, mixer, cases and racks sold used | $21,000 |
| Settling the last fourteen months of the lease | minus $8,400 |
| Accountant for the final returns | minus $1,800 |
| Clean-out and haul-away | minus $1,200 |
| Left before taxes | $9,600 |
Worked example with made-up figures. Your equipment, lease and costs will differ. Ask your landlord and accountant for real numbers before you decide.
Chapter 2
Paula assumed buyers wanted big companies with managers and spreadsheets. Her bakery had a cash drawer and a notebook. She looked up what businesses like hers actually sold for, using closed sales, not asking prices.
A sale price usually includes the equipment. So the fair comparison is the whole sale against the closing-out number, not one added to the other. Even at the bottom of the range, Paula's sale is several times what closing leaves.
Small businesses sell all the time. BizBuySell counted 2,345 closed sales on its marketplace in the first quarter of 2026, at a median price of $350,000. Half of those sold for less.
| Yardstick | Multiple | What it gives Paula |
|---|---|---|
| Restaurants and cafes, closed sales | 1.3x to 2.2x SDE | $80,600 to $136,400 |
| All deals under $500,000, median | 2.0x SDE | $124,000 |
| Closing it out, from chapter 1 | Equipment less costs | $9,600 |
Sources: BizBuySell industry multiples (closed sales), IBBA and M&A Source Market Pulse Q4 2025. Worked example, not a valuation.
Chapter 3
Mateo Ruiz has baked the overnight bread for eight years. When Paula mentioned Easter, he went quiet, then asked if she had thought about who might keep the ovens on. She had not thought of him.
A buyer for a business this size is rarely a company. It is usually a person buying a job they can own, with customers already coming through the door.
That buyer looks at different things than a big investor would. Steady sales over three years, a lease they can take over, and someone who knows how the work gets done.
An employee who knows the recipes, the suppliers and the regulars. They usually need help with the price, through seller financing, a loan or both.
Someone in the same trade working for another owner. They are buying the customers who already come in.
A cafe or bakery in the next town that wants a second spot with a following. Screen them carefully, because a competitor can also just be curious.
Someone with savings and a manager's background who wants to own a place. They will ask who does the baking and how long you will stay to train them.
Chapter 4
Mateo had savings, but not $110,000. Paula's accountant suggested she carry part of the price herself. Mateo pays $22,000 down, which is 20%, and Paula holds a note for $88,000.
At an example 8% over 5 years, Mateo pays Paula about $1,780 a month. That is about $21,360 a year, out of the $62,000 the bakery earns.
The check that matters is whether the payment fits. Here it leaves Mateo about $40,640 a year to live on before taxes, for five years. That is tight, and only Mateo can say whether it works for him.
Seller financing is common in small sales. In BizBuySell's Q2 2026 survey, 90% of buyers expected it to play a part, while only 29% of owners planned to offer it. Morgan & Westfield, a brokerage, says seller notes are often 10% to 40% of the price.
A seller note is a loan, and it carries risk. A real down payment, a personal guarantee and a filed claim on the business assets protect you. Your own attorney drafts or reviews the note and the security agreement.
Chapter 5
Paula's real problem was the calendar. Easter was five months away. A sale can take that long or longer, and once the ovens are sold there is nothing left to buy.
BizBuySell's Q2 2026 report put the median time on market for service businesses at 155 days, about five months, as reported by Small Business Trends. That is the middle. Some sell faster, and plenty take longer.
So the order matters. Trying to sell first costs a few months and leaves closing open. Closing first ends the choice.
Chapter 6
Paula kept the sign out of the window. She ran the numbers, talked to Mateo, and listed the bakery blind in case he could not make it work. The landlord agreed to talk about moving the lease.
She has not closed the sale yet, and this guide does not pretend she has. What changed is that Easter is no longer a deadline. It is a date she can move.
Many owners care about more than the price. In BizBuySell's Q2 2026 survey, 30% of owners selling put business continuity and their employees first. A sale is the only version of the ending where the regulars still get their rye.
Every YourBizWorth listing is blind, so customers and staff do not hear about it while you decide. If no verified buyer asks about your business in your first 90 days, your next 90 days are free, ads included (conditions in the Terms).
We are not lawyers, brokers, appraisers or lenders. The purchase agreement, the seller note and the closing papers go to your own attorney, and your accountant estimates the taxes either way.
If it does not pay its owner a living after the bills, a buyer has nothing to buy but equipment.
If the work, the license or the customers leave when you do, and you cannot change that in time, closing may be honest.
If the landlord will not transfer or renew it, a buyer may not be able to stay in the space.
You listed early, verified buyers looked, and nobody made an offer you could accept. Then you close, knowing you asked.
YourBizWorth is not a broker, appraiser, or law firm. This guide is general information, not legal, tax, or lending advice.
Often not. IBBA and M&A Source reported a median of 2.0 times owner earnings on sales under $500,000 at the end of 2025. A business that pays its owner a steady living, with customers who come back, usually has something to sell.
Everything that is not equipment: the customers, the phone number, the name and the jobs. Used equipment sells for used prices, and closing has its own costs, like settling the lease and filing final returns.
Service businesses spent a median of about five months on the market in the second quarter of 2026, according to BizBuySell figures reported by Small Business Trends. Start well before the date you would close.
At the federal level, the IRS expects a final return and, if you have staff, final payroll returns and W-2s. The SBA also lists state dissolution papers, canceling permits and licenses, and keeping records. Your accountant and attorney know your state's steps.