How to sell a business in Texas.
How to sell a small business in Texas, step by step: valuation, preparation, confidential marketing, buyers, letter of intent, due diligence, financing, and closing.
Selling a business in Texas follows eight steps: get a defensible valuation, prepare your financials and operations, decide on deal structure, market the business confidentially, screen and negotiate with buyers, sign a letter of intent, complete due diligence and financing, and close. Most well-prepared small and lower-middle-market businesses take six to twelve months from preparation to closing. Texas has no state personal income tax, but federal tax, deal structure, and any real estate in the sale all affect what you take home.
1. Know what your business is worth
Start with normalized earnings: SDE for owner-operated businesses, EBITDA for larger ones. Buyers price on a multiple of those earnings, adjusted for growth, recurring revenue, customer concentration, and owner dependence. Our valuation calculator gives a quick range; a confidential opinion of value built from your actual books gives a number you can defend.
2. Prepare the business before you list
Clean, consistent books that match your tax returns, documented add-backs, a team that can run the business without you, and tidy leases, licenses, and contracts. Preparation is the biggest lever on both price and speed. See how to prepare your business to sell.
3. Decide how you want to be paid
Most small business sales are asset sales, and many include a seller note, an earnout, or SBA financing for the buyer. Structure changes your after-tax proceeds and your risk, so model it with your CPA before you accept an offer. See asset vs. stock sales and seller financing and earnouts.
4. Market it confidentially
Describe the business without naming it, qualify buyers for funding and fit, and release details only after an NDA. In Texas, the buyer pool includes private equity roll-ups, family offices, search funds, SBA-backed operators, strategic acquirers, and investors from Northern Mexico. See how to sell confidentially.
5. Negotiate and sign a letter of intent
Compare offers on total value, cash at closing, structure, contingencies, and the buyer’s ability to close, not just headline price. The letter of intent sets the main terms and usually grants the buyer a period of exclusivity for diligence.
6. Due diligence, financing, and closing
The buyer verifies your financials, operations, contracts, and legal standing while their lender underwrites the deal. If the sale includes real estate, title and survey work run in parallel. Expect 30 to 90 days from letter of intent to closing for a well-prepared business. See how long it takes to sell a business.
Texas-specific points
Texas has no state personal income tax, which helps sellers, but federal capital gains and ordinary income treatment still apply (see taxes on the sale of a business). A transaction that includes real property may require a licensed Texas real estate agent for that portion. Sales tax permits, franchise tax accounts, and any TABC or other licenses need attention at closing. Confirm every point with your Texas attorney and CPA.