Company figures shaking hands
What to expect if you decide to sell your business

Over the past year, the industry has seen numerous acquisitions in the propane industry, and all indications are that this trend will continue in 2022. Before you make the decision to sell your propane business, it is important to be prepared and understand the process.

Your Company’s Worth

Most business owners feel they have an idea of what their business is worth. However, in my experience, this self-assessed amount is rarely accurate. There are numerous factors that go into a valuation, and business owners do not often consider them or how they impact the value. These factors include location, customer type, tank ownership, sales, storage, fleet, employees and technology.

For example, a business located in one region of the country may have different value than a similar business located in a different region. In some cases, the most important factor could be the goals of the buyer, which might be strategically growing or a desire to enter a particular market. If that is the case, the value of a business in the target market would be more valuable to that buyer. Failing to understand and consider all the factors could result in a 30% to 40% swing in the prices being offered by multiple buyers.


Instead of trying to navigate the market alone, business owners have the option to engage a professional, who can provide an accurate valuation, offer input on a valuation range, provide feedback and insight that can impact the value and even offer suggestions as to how a business could improve its valuation potential.

These professional valuations are generally affordable and more accurate than trying to determine how much your business is worth on your own.

Using an Experienced Consulting Partner vs. Doing It Yourself

Selling a business is something most successful owners have little-to-no experience with, and since it is a very time-consuming process with a lot of ups and downs, using an experienced consultant can be very valuable.

When choosing a consultant, make sure the consultant you hire understands the industry you are in, has relationships with a large network of buyers and most importantly understands your business and how to present it.

Once chosen, an experienced consultant will provide a market valuation and drive the entire process for you, allowing you to continue to run your business throughout the process. Besides the experience and convenience, the right consulting partner will likely bring you a larger number of qualified buyers. That generally leads to more offers, which greatly increases the opportunity to find the right buyer and the best possible price.

Consultants typically work on a contingency fee, meaning they receive a percentage of the sales price. However, in the end, that fee is only a small portion of the sales price, and the work performed by the consultant could be the difference in thousands or hundreds of thousands of dollars to the sales price.

Understanding the Process

The typical process has four major phases: preparation, information sharing and negotiation, due diligence, and purchase agreement and closing.

  1. Preparation — All selling businesses need to be prepared to provide the buyer with substantive documents related to the company, its operations and its sales. If utilizing a consultant, this information will be used by the consultant to determine the market price and range. They will also compile the information into a prospectus package that will be given to buyers.
  2. Information sharing and negotiations — Once the information is ready to share, the selling business should require interested buyers to execute a Confidentiality and Non-Disclosure Agreement, which is intended to keep the shared information confidential and not used for any other purpose. Once executed, the information is shared, and the buyers start the process of evaluating the business. After reviewing the information, interested buyers will present offers and the parties will begin negotiations until a mutually acceptable offer is agreed upon.
  3. Due diligence — The selected buyer will start performing deeper analysis of the information provided and conducting its own investigations (due diligence). Some buyers may request in-person meetings with the owners, executives and employees and may even request discussions with customers and suppliers. Selling businesses may choose to limit the amount of due diligence until a purchase agreement is executed.
  4. Purchase agreement and closing — Once the buyer is satisfied that the information provided is true and accurate and is ready to move forward with the sale, the parties will negotiate the terms of a definitive purchase agreement. Each of the parties’ attorneys will be involved during this process. In addition to the general terms of the sale, purchase agreements frequently include schedules/exhibits which list the assets, proprietary information, intellectual property, allocation of funds and other relevant information. Some parties will choose to execute the purchase agreement and then set a closing date, while others may choose to negotiate the purchase agreement but not sign until the closing date. The closing is the formal process when the funds are paid and the business is transferred to the buyer.

Understanding the Timing

Timing depends on many factors, including but not limited to demand within a particular market range or location, the size of the business, how well a business is operated, how well the business is organized and how long it takes the parties to complete the due diligence phase.

When using a consultant, the anticipated timeline to sell an average-sized, sought-after business in a high demand market will take about five to six months between the preparation phase and the closing. A larger business can expect six to seven months. A business in a less desirable market or a business that may be more difficult to sell for other reasons may take longer (12 to 18 months or more). For business owners who choose to sell their business themselves, the process may take even longer.

How to Select the Right Buyer

This question is one that weighs very heavily on most sellers, as they want to be sure their legacy, employees and customers are taken care of. When business owners are considering multiple offers, they must also look beyond the purchase price and interview the buyer. Variables to consider include how the buyer intends to run the business, whether the buyer will move operations of the business to a new location, whether the buyer will retain employees and how the new owners will change the culture of the business.


The process of selling your business is important, time-consuming and extremely emotional. Your business was built over years and likely generations, but you only get one chance to sell it. Make sure you use the resources and professionals available to assist you with a successful transition.

Chad Pendill has been in the propane industry for 31 years and is the founder of Legacy Energy Consulting, where he specializes in consulting with marketers on the sale of their business. You can reach him at 763-772-2834 or


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