Getting Your Texas Business Ready to Sell: The Owner’s Checklist

Most owners start getting ready to sell about a week before they want to sell.

Something happens. A buyer calls out of the blue. A health scare. A partner wants out. Or you just wake up one morning tired. Then you open the books and realize the business you built isn’t the business a buyer can buy.

I’m Harvey Baker Jr., a licensed Texas agent in McKinney. I work with North Texas owners who run shops, practices, and crews of about 5 to 50 people. Here’s the plain-English checklist I’d want an owner to work through years before a sale, not weeks.

What a buyer is really buying

You think you’re selling your trucks, your client list, and your name on the building.

A buyer thinks about it differently. They’re buying future cash flow and asking one question over and over: will this keep working after the owner leaves?

Every item below is a way to answer that question with a yes.

1. Get the books buyer-ready

If your financials live in your head, a shoebox, or a bookkeeper who quit in March, start here.

• Several years of clean financial statements. Buyers usually want to see a track record, not one good year.

• Separate personal and business spending. The family phone plan and the lake house trip don’t belong on the company card.

• Know your real profit. Your CPA can help you spell out which owner expenses get added back so a buyer sees what the business actually earns.

• Taxes filed and current. Surprises here slow everything down.

How a sale gets structured can make a big difference in what you keep after taxes. That’s a CPA and attorney conversation, and the earlier the better.

2. Make yourself less necessary

This is the hard one. Owners who do everything build businesses that can’t be sold without them.

• Who talks to your biggest customers? If the answer is only you, start handing off relationships now.

• Who prices jobs, orders materials, and signs off on work?

• Is the way you do things written down anywhere? Checklists, job steps, vendor contacts, passwords.

• Could you take two weeks off without your phone? If not, a buyer will notice.

Ask yourself: if I disappeared for a month, what would break first? Fix that, then ask again.

3. Lock in your key people

Buyers look hard at who stays after the sale. If your operations lead or top salesperson walks out the door the week after closing, the deal can fall apart or the price can drop.

• Do your key people have a reason to stay? Some owners use retention bonuses, executive bonus plans, or other incentives. I wrote about one option here: Section 162 Executive Bonus Plans.

• What happens if one of them dies or gets hurt before the sale? That’s a key person question, and it’s covered here: Key Person Insurance for Texas Small Businesses.

4. Clean up customers, contracts, and paperwork

• Customer concentration. If one customer is a huge share of revenue, that’s a risk a buyer will price in.

• Leases and contracts. Can they transfer to a new owner? Are key contracts in writing at all?

• Licenses and permits current and in the right name

• Ownership records. Operating agreement, stock or membership records, and any old partner deals settled and documented

• Pending disputes handled or disclosed

Your attorney is the one to review this. I’m not giving legal advice. I’ll just tell you that loose paperwork is one of the easiest ways to lose time and leverage in a deal.

5. Close the protection gaps before someone else finds them

Here’s the part most sale checklists skip. A lot can go wrong in the years you’re getting ready.

• Is your buy-sell agreement current and funded? If a partner dies or is disabled before the sale, the agreement decides what happens next. More here: How to Fund a Buy-Sell Agreement With Life Insurance.

• Did you sign personal guarantees on loans or leases? Your family may be on the hook if something happens to you before you sell. More here: Signed a Personal Guarantee? Your Family Co-Signed Too.

• If you couldn’t work for six months, would the business still be worth selling? More here: Disability Coverage for Owners.

You spent years building the value. These are the things that protect it until you can cash it in.

Hypothetical example for illustration only: Picture two partners who own a 25-person commercial cleaning company in Denton County. They plan to sell in about three years. One partner handles every major client relationship personally. Their books mix in some personal expenses, and their buy-sell agreement was signed years ago with no funding behind it. If that partner had a heart attack next year, the remaining owner could be stuck with clients who don’t know anyone else, a spouse who now owns half the company, and no money to buy the shares. Nobody did anything wrong. They just planned for the sale and not for the years before it.

6. Build your team early

You don’t sell a business alone. Most owners need some mix of:

• A CPA for the financials and the tax side of the deal

• An attorney for contracts, the agreement, and closing documents

• A sale advisor who knows how buyers think and can help find the right ones

• Someone looking at the protection side, so a death, disability, or departure doesn’t blow up the plan

Securities, legal, and tax questions go to licensed professionals in those fields. If a sale or recapitalization is on your radar, call or text me and we’ll talk through where to start.

The short checklist

Print this and answer it honestly:

1. Could a buyer trust my books today?

2. Could the business run for a month without me?

3. Do my key people have a reason to stay through a sale?

4. Is any one customer too big a share of revenue?

5. Are my contracts, leases, and ownership records in order?

6. Is my buy-sell agreement current and funded?

7. Have I talked to my CPA and attorney about a sale?

Every “no” is something to work on. Better to find it now than across the table from a buyer.

Nothing in this article is tax, legal, or financial advice. Consult your tax or legal professional for advice specific to your situation.

Coverage, eligibility, and rates vary by carrier and health. Cheap is a price. Right is a fit.

Get your Gap Map (free, 20 minutes)

If you want a clean starting point, I built a one-page Gap Map: where your home, your business, and your exit still depend on one person. Three columns. Plain English. You keep it either way, whether you buy anything or not.

Call or text 430-373-7752 with the word MAP for a free one-page Gap Map. Or learn more at bakerlegacypartners.com.

Built by you. Protected without you.

Insurance products involve costs, limitations, exclusions, and suitability considerations. This article is educational and is not tax, legal, or financial advice.

Harvey Baker Jr., Licensed Texas Life, Accident & Health Agent, TX License #3470534. Coverage, eligibility, and rates vary by carrier and health.