Straight answers to the questions every California seller asks.

Your business is worth what a buyer will pay for it, and that is mostly based on your cash flow. For most small businesses in California, value is tied to seller's discretionary earnings (SDE), which is your profit plus your salary, perks, and one-time expenses added back in. A common range is 2 to 4 times SDE, depending on the industry, how clean your books are, and how much the business depends on you personally.

The only way to know your number is a real valuation, not a guess. I do a $399 valuation that gives you a realistic range before you decide anything.

Most small businesses take 6 to 12 months from listing to closing. The national median was 168 days on market in 2024, but California deals often run longer because of financing, lease assignments, and license transfers.

The biggest factors are how clean your financials are, whether your price is realistic, and how fast a buyer can get funding. If your books are messy or your price is too high, expect it to take longer.

Most California business brokers charge a success fee, which is a percentage of the sale price paid only when the deal closes. For businesses selling under $1 million, that is usually 8 to 12 percent. For larger deals, the percentage steps down as the price goes up. There is no fee if the business does not sell.

Before you sign anything, read the listing agreement carefully, especially the length of the agreement and the tail clause, which says whether the broker still earns a fee if a buyer they introduced closes after the agreement ends.

You do not have to use one, but most owners do because selling a business is a full-time job on top of running one. A broker finds and vets buyers, keeps the sale confidential, handles the paperwork, and negotiates the deal so you can keep operating.

In California, anyone paid to negotiate the sale of a business must hold an active California Department of Real Estate broker license. I hold DRE #02111340. Before you hire any broker, check their license at dre.ca.gov.

Start with three years of profit and loss statements and three years of federal tax returns for the business. You will also need a current balance sheet, your lease, any equipment lists, and licenses or permits.

Buyers and their lenders will ask for all of it, and deals slow down fast when the paperwork is not ready. Getting your books in order before you list is the single best thing you can do to sell faster and for more.

Buyers come from listing sites like BizBuySell, from a broker's own buyer list, and from direct outreach to people already in your industry. A good broker markets your business confidentially, using a blind listing that describes the business without naming it, and every buyer signs an NDA before they learn your name, your location, or your financials.

I currently work with around 600 buyers and keep a live list of who is looking for what.

Not if the sale is handled right. Your business is marketed under a blind listing, with no name, no address, and no financials shown publicly. A buyer only learns who you are after signing an NDA.

Your staff, customers, and suppliers should not hear about it from anyone but you, when you decide to tell them.

A letter of intent is a buyer's written offer that lays out the price, the payment terms, and the conditions of the deal before the full purchase agreement is drawn up. It is usually non-binding except for parts like confidentiality and exclusivity.

Once both sides sign the LOI, the buyer starts due diligence, which is their deep check of your financials, lease, contracts, and operations.

Due diligence is when the buyer verifies everything you told them. They review your financials, tax returns, lease, customer contracts, and operations, and they usually bring in an accountant and sometimes a lender.

This is where deals fall apart if the numbers do not match what was presented. Clean books and honest numbers are what get a deal through due diligence.

Yes, you should have one. A broker handles the sale, the marketing, and the negotiation, but a lawyer reviews the purchase agreement and protects your interests on the legal terms. I am not an attorney and I always advise my clients to have their own counsel review documents before signing.

Seller financing is when you, the seller, lend part of the purchase price to the buyer and they pay you back over time, usually with interest. It is common in small business sales because it helps buyers who cannot get full bank financing, and it can help you get a higher price.

The terms, like the down payment, the interest rate, and the repayment period, are negotiated as part of the deal.

Look for three things. First, a valid California DRE broker license, which is legally required. Second, real experience selling businesses like yours, in your area, with closed deals you can verify. Third, a process that protects your confidentiality and keeps you informed.

Ask how many businesses they have sold, what their average sale price is compared to asking price, how they market, and whether they will give you references from past clients.

I have owned and sold three businesses myself, I hold DRE #02111340, and I work with sellers across Southern California. If you want to talk through whether I am the right fit, book a free 15-minute call.