How to Sell a Business in Washington State

How to Sell Your Washington State Business: A Roadmap to Success

You’ve built a thriving business in Washington state and you can see the finish line where working 60 hours a week should transition to playing golf 20 hours a week in retirement. Perhaps you are the last executive in a construction company passed down through generations, or a cutting-edge tech firm you nurtured from a garage startup. Whatever your story, you’re now considering selling your pride and joy. But where do you even begin?

Selling a Washington State business, especially a family-owned one, is a complex process filled with emotions and practicalities. This guide will equip you, the Washington state business owner, with the knowledge and steps to navigate this journey.

Selling a Washington State Business? Is There a Market for My Business?

The good news? There’s likely a hungry buyer out there for your business – a person that has the right experience, financial capability, and drive to make an acquisition. Here’s why:

  • Strategic Acquisitions: Bigger players might want to acquire your business to expand their market share, access your unique technology, or eliminate competition.
  • Financial Acquisitions: Investors are constantly on the lookout for profitable businesses with a solid track record. Your company could be their next gold mine.
  • Succession Planning: Perhaps you don’t have a family member interested in taking over. A buyer might see your well-established business as the perfect jumping-off point.

Think about your company’s strengths. Is it a local institution with a loyal customer base? Do you have a proprietary product or service? Do you have a great management team, staff, and steady cash-flow? These factors can make your business highly attractive.

Your industry makes for a large difference in the range of potential buyers. A remote operated technology company will have buyers from all over the country, an ecommerce company with real property should consider a business and property sale potentially to two separate buyers,, and a niche manufacturing business with $2-5M EBITDA will garner interest from strategic buyers or private equity groups.

Time the Market for the Sale: What is My Business Worth?

This is a crucial question, but resist the urge to trust your gut, an online calculator, or even a simplified valuation from your CPA.  Washington State has a healthy business market, and you deserve an accurate picture. Here’s where a business broker or certified valuation analyst comes in.

These professionals use multiple valuation methodologies to determine a fair market value range for your business, a rough idea of the marketability of the business, and the most likely financing structure for a sale..  They consider factors like your financial statements, industry trends, and recent transactions of similar businesses. This ensures you get the best and accurate value range for what the business can be sold for, and what side of the range your company falls. 

By working with a business broker, you will not only get an understanding of what your business is worth, but you will also gain insight into the buyer pool and if its worth holding and growing, or hitting the gas pedal to sell when the market is right (e.g. after the pandemic, after the supply chain crunch, after hiring challenges and interest rates diminish).

Is My Business Ready to Sell: Can I Pass the Vacation Test?

Imagine this: You’re on a dream vacation in the Bahamas, phone switched off, completely disconnected.  Now, imagine your business keeps running smoothly in your absence. If that’s the reality, congratulations! You’ve passed the vacation test buyers love to use when considering an acquisition..

This test highlights the importance of a strong management team and well-defined processes. A buyer wants to see a business that can function independently, without constant owner oversight. Investing in a capable team is an investment in your company’s future and its selling price.

Assemble a Team of Trusted Advisors

Selling a business is a team sport. Here are the key players you need on your side:

  • Business Broker/M&A Professional:  Think of them as your matchmaker. They’ll identify potential buyers, handle negotiations, and guide you through the entire sales process. In Washington, remember, a business broker must be a licensed real estate agent. Their knowledge of commercial real estate can be invaluable, whether you’re selling the property with the business or setting up new long-term leases for the buyer.
  • CPA: Your financial statements are a buyer’s bible. Your CPA will ensure your financials are clean, accurate, and tell the story of your business’s financial health. Capital gains tax is a critical part of understanding your take-home amount in a sale. Your CPA will help you evaluate the possible ways to reduce your capital gains tax exposure, and if your business qualifies for a Washington state capital gains tax exemption.
  • Transaction Attorney: The legalese involved in selling a business can be mind-boggling.  A transaction attorney will draft and review crucial documents like the purchase agreement, protecting your interests throughout the process.
  • Financial Advisor:  Selling your business can be a significant financial event.  A financial advisor will help you develop strategies to manage the proceeds of the sale,  including tax implications.

When Exit Equity works with clients, we can bring additional trusted advisors to the table if the client is lacking partners with transaction experience and managing a windfall capital gains event.

Prepare Your Business for Sale:

Organized stacks of paper with clips

Before diving headfirst into the sale process, it’s crucial to assess both your business’s readiness. Here’s what you need to consider:

Organize Your Financial Documents and Records:

Imagine a potential buyer asking for crucial financial documents, and you’re scrambling to find them. Not a good look!  Get organized well in advance.  This includes tax returns, profit and loss statements, balance sheets, customer contracts, and any relevant legal documents.  A clean and well-maintained financial history portrays a stable and well-managed business.

Evaluating the Market Value of Your Business:

As discussed earlier, resist the urge to guesstimate your business’s worth.  A professional business valuation provides an objective and defensible assessment of your company’s fair market value.  This empowers you to enter negotiations from a position of strength and ensures you get a fair price. Additionally, if you own the property where your business operates, you should understand the fair market value of the property in a sale, or updating lease to current property comps for similar properties in your area. You may want to sell the property and look at a 1031 exchange for a new investment, or become a landlord for the new tenant and use the rental income as part of your retirement plans.

Addressing Legal and Regulatory Compliance Issues:

Unresolved legal or regulatory issues can be a major red flag for potential buyers.  Proactively identify and address any outstanding issues.  This might involve resolving outstanding permits, licenses, liens,or environmental concerns, or how to transfer key regulatory licenses to the new owner.  Demonstrating compliance showcases a responsible and well-managed business.

Enhancing the Attractiveness of Your Business to Buyers:

Think of your business like a house you’re putting on the market.  You want it to be as appealing as possible.  Here are a few ways to boost its attractiveness:

  • Strengthen Your Management Team:   As mentioned earlier, a strong and capable management team allows a business to function smoothly without constant owner oversight.  Invest in leadership training and development to bolster your team’s capabilities.
  • Reduce Reliance on Key Employees:  A business overly reliant on one or two key individuals is a risky proposition for a buyer.  Develop a strong succession plan and cross-train employees to ensure your business knowledge isn’t siloed.
  • Streamline Operations:  Inefficient processes and redundant systems can eat away at profits.  Streamlining your operations demonstrates a commitment to efficiency and cost-effectiveness, making your business more attractive to potential buyers.

By taking these steps, you can ensure your business is in prime condition to attract qualified buyers and command a top dollar price. 

Go To Market and Deal Execution

Now that you have your team assembled, it’s time to showcase your business to the world! Here’s what your advisors will help you do:

  • Develop a Marketing Package:  This is essentially your business’s resume, highlighting its strengths, financial performance, and future potential. It’s what attracts potential buyers.
  • Confidentiality Agreements: Before sharing sensitive information, your attorney will ensure potential buyers sign confidentiality agreements to protect your business secrets.
  • Buyer Qualification:  Not all offers are created equal. Your team will help you identify serious, qualified buyers who are a good fit for your business.
  • Negotiations: Contract terms are just as important as sale price. Selling a business involves give-and-take, but you should set yourself up for success and get terms that work for you. Will the buyer want an earn out because they are not confident in future performance? WIll there be hold back, a promissory note, or bonus incentive for key employees? WOuld you consider being on the company’s board in the future? Do you want roll-over equity to capture future upside in the business? It can get quite complicated balancing deal terms, price point, buyer financing capability, and cash in your pocket at close! Your broker will coordinate with a transaction attorney and a CPA to ensure you understand any tax implications (capital gains, ordinary income, capital equipment deprecation recapture,goodwill, real estate, personal property, etc.)
  • Due Diligence:  Buyers will want to thoroughly examine your business before finalizing the deal. Exit Equity will be the quarterback to facilitate this process with your other advisors, ensuring a smooth transition and all bases are covered.
  • Closing:  This is where all the hard work pays off!  Your attorney will ensure all legal documents are signed, the sale is finalized, and cash transfers.

Why use a Business Broker for a Washington State Business Sale?

Two Business People looking over a document together.

Having a local business broker on your side can make all the difference when selling a business. The top benefits of hiring a mergers and acquisition professional are:

Industry Knowledge:

Washington state boasts a diverse business landscape.  A qualified business broker will have a deep understanding of your specific industry, including current market trends, valuation benchmarks, and the unique challenges and opportunities your business faces.  This knowledge is invaluable when positioning your business for sale and attracting qualified buyers.

Network of Potential Buyers:

Business brokers cultivate extensive networks of potential buyers, including strategic acquirers, financial investors, and qualified individuals seeking to own a business in your industry.  This network allows them to identify the most suitable buyers for your business, maximizing your chances of a successful sale.

Marketing Channels:

Selling a business isn’t about putting a “For Sale” sign in the window.  Business brokers have access to a variety of targeted marketing channels to discreetly showcase your business to qualified buyers.   This might involve online databases, industry publications, or even direct outreach to potential acquirers.

Valuation Expertise:

As discussed earlier, obtaining a professional business valuation is crucial to ensure you get a fair price for your business.  Business brokers often have experience working with valuation analysts and can guide you through the valuation process, ensuring you have a defensible market value for your company.


Selling a business can be a sensitive process.  A business broker will ensure the confidentiality of your sale.  This means they’ll only disclose information to qualified buyers who have signed non-disclosure agreements (NDAs) to protect your business’s sensitive information. You will want to limit the rumor mill on a potential company sale as much as possible among your employees, customers, vendors, and competitors.

Financial and Legal Experience:

Business negotiations involve complex financial considerations.  A business broker will have the experience to understand your financial statements and translate them into a compelling case for your business’s value.  They can also collaborate with your legal team to ensure the purchase agreement protects your interests throughout the sale process.

In essence, a Washington state business broker is your one-stop shop for navigating the intricacies of selling your business.  They provide expert guidance, manage the heavy lifting, and advocate for your best interests, allowing you to focus on the emotional transition of letting go of your business and embracing the exciting possibilities that lie ahead.

Selling Your Washington Business: A Smooth Journey

Two Men shaking hands after a Business Meeting

Selling your business can be a rewarding experience. By following these steps and assembling a team of trusted advisors, you can ensure a smooth and successful sale. Remember, this is a marathon, not a sprint. Patience, preparation, and a focus on maximizing value will lead you to a happy ending.

If you’re a Washington state business owner considering selling your company, don’t hesitate to reach out to the team at Exit Equity.  We have sold businesses throughout Washington, with great local experience in Seattle, Bellevue, Vancouver, Bellingham, and Spokane. We can answer your questions specific to your industry, your business, and exit goals.  With the right team by your side, you can confidently navigate the exciting journey of selling your business and watch your legacy live on in the hands of a capable new owner.

Frequently Asked Questions for Selling a Washington State Business:

How long does it typically take to sell a business in Washington state?

The timeframe for selling a business in Washington can vary depending on several factors, but generally takes  6 to 10 months.  A well-prepared business with a strong market presence can sell more quickly, while complex businesses or those in niche industries might take longer.

What are the main factors that influence the value of a business in Washington state?

Several factors influence a business’s value in Washington:

  • Financial performance: Profitability, revenue growth, and overall financial health are key drivers of value.
  • Industry: Market trends and valuation benchmarks within your specific industry play a significant role.
  • Assets: The value of your tangible assets (equipment, inventory, real estate) and intangible assets (goodwill, intellectual property) contributes to the overall business value.
  • Management team: A strong and capable management team demonstrates stability and future potential.
  • Market demand: The overall demand for businesses in your industry can significantly impact the selling price.

Do I need to hire a business broker to sell my business in Washington state?

Hiring a qualified business broker is not mandatory, but highly recommended.  They offer expertise in valuation, marketing, negotiation, and navigating the legal complexities of a business sale.  Their experience and network of potential buyers can significantly increase your chances of a successful sale and maximize your return on investment.

What are the legal requirements for selling a business in Washington state?

There are several legal requirements to consider when selling a business in Washington, including:

  • Bulk Sales Act: If selling a significant portion of your inventory or assets, you might need to notify creditors in advance.
  • Employment Law: There are legal requirements regarding employee notification and severance pay during a business sale.
  • Tax implications: You’ll need to comply with state and federal tax regulations.

Consulting with a business attorney and CPA is crucial to ensure you meet all legal obligations associated with selling your business.

How can I find potential buyers for my business in Washington state?

There are several ways to find potential buyers:

  • Business Broker: A qualified business broker has a network of potential buyers and can discreetly market your business to qualified acquirers.
  • Online Marketplaces: There are online platforms specifically designed to connect business sellers and buyers.
  • Industry Publications: Targeted industry publications might be a good place to advertise your business for sale. That said, notifying your competition you are selling isn’t always a great strategy…and competitors typically will pay the smallest amount as they think they can replicate your business.

What are the tax implications of selling a business in Washington state?

You’ll likely be subject to capital gains tax on the sale of your business.  However, Washington offers an exemption for a portion of the capital gains tax on qualified businesses.  Consulting with a tax advisor is essential to understand your specific tax liabilities and take advantage of any available exemptions.

Can I sell only part of my business or assets in Washington state, or does it have to be sold as a whole?

Yes, you can potentially sell only part of your business or specific assets in Washington state…or roll over equity into the buying entity.  However, this can be more complex than selling the entire business.  Consulting with a business attorney is recommended to navigate the legalities of a partial business sale.

How do I change ownership of an LLC in Washington state?

The process for changing ownership of an LLC in Washington state involves amending the LLC’s operating agreement and filing the amendment with the Washington Secretary of State.  Consulting with an attorney specializing in business law is recommended to ensure a smooth and compliant transfer of ownership.

About Exit Equity

Since 2005, we’ve helped hundreds of business owners make the biggest change in their career—shifting from owning a successful, privately-held business into a relaxing, passion-driven retirement. Meet the experienced team behind the work.

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