How to Sell a Service Business – Guide to a Profitable Exit

Selling a service business isn’t like offloading a storefront with shelves of inventory. You’re passing on the systems, relationships, and reputation that drive your revenue. These qualities are harder to measure but matter more than anything to a serious buyer.

Only 20 to 30% of service businesses that go to market actually sell, according to Trafft. That figure alone shows how important it is to plan carefully and bring in the right help before you start selling.

If you’re starting to consider an exit strategy, this guide outlines what sets service-based businesses apart and what to expect throughout the sales process.

What Makes Service Businesses Unique in the Sales Process

Most service-based companies don’t rely on physical products. Instead, their value comes from recurring work, loyal customers, and reliable business operations. Potential buyers will be looking for structure and scalability.

If the company revolves around you, that’s a risk. If it runs well without your constant involvement, that’s value. Defined roles, a trained sales team, and repeatable services make a stronger case during a business sale.

Step 1: Organize Financials and Prepare for Selling a Service

Before anything else, take a hard look at your financial records. Prospective buyers expect clean books. At a minimum, that means three years of tax returns, financial statements, and balance sheets. If reporting is inconsistent, it can delay the sale or weaken your asking price.

You’ll also want to document how your business runs. This includes team responsibilities, customer onboarding, and workflow systems. The more clarity you offer, the easier it is for potential clients to understand your overall value.

Step 2: Business Valuation and Setting the Right Purchase Price

Pricing your service-based business correctly is one of the most important steps in the sales process. A proper business valuation considers profit margins, customer retention, business structure, and risk. A business with steady contracts, a solid customer base, and low overhead tends to earn a stronger purchase price.

An experienced business broker can walk you through what similar service business sales have looked like, how to benchmark your company, and what to expect from interested parties.

Step 3: Attracting and Vetting Potential Buyers Confidently

Finding the right prospective buyer isn’t just about exposure. It’s about filtering for qualified leads who understand the industry, have the funding, and can step into your role confidently.

A business broker manages outreach, protects sensitive info with non-disclosure agreements, and screens for serious potential buyers. This protects your team and keeps your small business running while the process unfolds.

Step 4: Managing Due Diligence and the Sales Process

Once an initial deal is agreed upon, due diligence begins. This phase includes reviewing legal documents, business assets, contracts, and information gathered during early conversations. Buyers use this to verify the true value of your business.

Missing documents, unresolved tax liabilities, or vague services can stall the deal. A broker keeps the process on track, helps you meet the time frame, and ensures both parties stay focused on the final sale price.

Step 5: Transitioning to the New Owner Smoothly

Once the signed purchase agreement is in place, it’s time to shift focus. The new owner needs support, whether that’s training, team introductions, or documentation on key business operations.

The smoother the handoff, the better it is for your team, clients, and potential customers. Most buyers expect a support window, and a well-prepared business owner can deliver that without stress.

Why a Business Broker Makes Selling a Service Business Easier

Selling a service business isn’t something most small business owners do every day. From pricing to managing the sales process, it’s a time-consuming task with high stakes.

That’s where a business broker makes all the difference.

At Advanced Business Brokers, we specialize in helping service-based companies navigate the full sales process, from the first discovery call to a signed deal. We understand what buyers expect, how to protect your value, and how to close with confidence.

If you’re ready to sell or just want input on your exit strategy, we’re here to help. Start with our guide on how to increase your company’s valuation, then let’s talk about how to position your service business for a profitable sale.

We don’t just connect you with parties involved; we help you protect your money, reduce risks, and close with clarity.

Work With An Experienced Business Broker

If you’re thinking about selling your business and don’t know where to start, consider speaking with our team here at Advanced Business Brokers. We specialize in brokering and advising exit plan strategies for various sizes/sectors of businesses.

Read More from ABB

Bob Paden

With over 25 years of dedicated experience, Bob empowers small business owners in the Indianapolis metro area to achieve their entrepreneurial visions, whether by building scalable operations or crafting highly sellable entities. For three decades, he’s cultivated a robust network of owners, buyers, and strategic partners, a resource he fully leverages to help clients meet their unique objectives.

Bob’s expertise spans a diverse range of industries, including trade-based businesses like construction, HVAC, skilled trades, and manufacturing, as well as white-collar professional service firms such as law, finance, marketing, and technical services. Beyond his client work, Bob actively contributes to his community, serving as Treasurer for the Boone County Chamber Board and as well as a board member for both the Central Indiana Police Foundation (CIPF) and Fiscal Sponsorship Allies (FSA).  

Bob holds a degree in Mechanical Engineering Technology from Purdue University in West Lafayette, Indiana, and teaches there as well in the Certificate in Entrepreneurship and Innovation Program, which is ranked among the Top 50 programs in the U.S.

He lives with his wife Lori in Zionsville, just outside Indianapolis, and in his free time, he enjoys working on his home, playing golf, and traveling.

Marissa Ihssen

With a degree in psychology and a professional background in social work, Marissa
brings a people-centered lens to every project. Her experience includes being a Project
Planning Specialist at GE Aerospace, creating efficient processes and structures that
help teams work smarter and stay aligned. Marissa joins the Main Street Market Maker
team with Advanced Business Brokers to dedicate time and attention to smaller
business opportunities and provide excellent and supportive customer service.
Outside of work, she is a mom of three young men who finds joy in the everyday chaos
of family life. She loves strong coffee, warm beaches, and any excuse to spend time in
the sunshine. Hot yoga and hammocking are some of her favorite ways to reset and
stay grounded and help her show up with more presence both at home and in my
professional life.

Steve DeMaio, JD, CEPA

Steve brings more than 20 years of experience as a legal and financial professional to
his work with business owners preparing for transition and sale. He advises owners and
their families through every stage of the exit planning and transaction process, with a
focus on thoughtful assessment, risk management, and strategic value enhancement.
Steve is a Certified Exit Planning Advisor (CEPA®) and an active member of the Exit
Planning Institute. He previously served as Director of the Small Business Development
Center in Toledo, Ohio, where he worked closely with entrepreneurs across a wide
range of industries on growth, financing, and succession planning initiatives.
Earlier in his career, Steve practiced law with a nationally recognized Chicago-based
law firm and held roles in capital markets and commercial banking with leading financial
institutions. This multidisciplinary background allows him to approach business
transactions with a practical understanding of legal, financial, and operational
considerations.
As a business broker, Steve specializes in industrial and manufacturing companies,
skilled trades, and professional service firms, including marketing, staffing, and financial
services businesses. Steve earned his Juris Doctor from Loyola University Chicago
School of Law and a bachelor’s degree in economics from the University of Notre
Dame. He lives in the Toledo area with his wife and two daughters. Outside of work, he
enjoys traveling, cooking, and spending time at his family’s lake house.

Dr. Mark Hagar

A lifelong resident of Fort Wayne, Indiana, Dr. Mark Hagar brings decades of hands-on experience in small business ownership, acquisitions, and turnarounds to his role as a business broker. Over his distinguished career, he has acquired and operated more than 20 companies and engineered over 50 successful turnarounds, giving him a uniquely practical understanding of what makes businesses succeed, and sell. His portfolio spans manufacturing, distribution, and service firms in industries including printing, education, military contracting, aerospace, and orthopedics. This diverse background enables him to identify value, anticipate buyer needs, and structure complex deals with confidence and precision.


Mark holds a Doctorate in Business Administration (DBA) from Cranfield University’s School of Management in Bedford, England—one of Europe’s leading business schools. His research on small business resilience and operational excellence has been recognized by the Small Business Institute (SBI), the United States Association for Small Business and Entrepreneurship (USASBE), and the International Council for Small Business (ICSB).


In addition to his business career, Dr. Hagar has served as a member of faculty at several institutions of higher education, including Holy Cross College (Notre Dame), Trine University, and the University of Saint Francis. He also hosted Your Business Matters, a small business–focused radio show and podcast for more than a decade and is the author of Small Fortunes – the Acquisition Entrepreneur’s Guide to Buying a Profitable Small Business.


A passionate advocate for entrepreneurs, Mark previously chaired the Indiana Leadership Council for the National Federation of Independent Business (NFIB), representing small business owners before state and federal legislators. He currently serves as President of the Allen County, Indiana Economic Development
Commission.


As a broker, Mark specializes in industrial, manufacturing, and distribution firms, with particular expertise in special situations, distressed assets, and complex transitions where experience, creativity and discretion are central to success.