Selling a Business in Texas

The Basics of Selling a Business in Texas

Let’s talk logistics. Selling a business is a process—and Texas has its quirks.

Legal Structure Matters

The first thing buyers will ask is about your business structure. Are you a sole proprietorship, LLC, partnership, or corporation? Each setup comes with its own legal and tax implications. For example, LLC owners may need to transfer ownership by amending the operating agreement, while a corporation might involve selling shares.

Asset Sale or Stock Sale?

In Texas, most small businesses are sold as asset sales. That means you’re selling specific assets—like equipment, inventory, and customer lists—instead of the entire entity. Asset sales often come with fewer liabilities for buyers, which can make your business easier to sell. However, if you’re structured as a corporation, you might also consider a stock sale—selling shares instead of individual assets.

Taxes: The Texas Advantage

Good news, as we know: Texas doesn’t have a personal income tax. However, you’ll still need to consider federal capital gains taxes on your profit from the sale. Plus, if you’re selling tangible property (like equipment), sales tax might apply. It’s smart to consult a CPA who knows Texas tax law to avoid surprises.

Certificate of No Tax Due

Before closing, Texas requires you to get a Certificate of No Tax Due from the Comptroller’s Office. This document shows buyers that your business doesn’t owe state taxes. It’s like a clean bill of health for your finances.

How to Sell Your Business Quickly in Texas

Speed matters to some sellers. Maybe you’ve got another opportunity lined up or personal reasons driving urgency. Here’s how to fast-track the process:

1. Get Your Financials in Order

   Buyers want clarity. Have at least three years of financial statements ready—profit and loss, balance sheets, tax returns. If your books are messy, hire a CPA to clean them up. Transparency is key to earning buyer trust and speeding up negotiations.

   
   

2. Understand Your Valuation

   What’s your business worth? In Texas, industry standards and local market conditions influence valuations. For example, a restaurant in Dallas might sell for 2–3x EBITDA (earnings before interest, taxes, depreciation, and amortization), while a tech company in Austin could fetch a much higher multiple. A business broker or valuation expert can help you set a realistic asking price.

   
   

3. Find the Right Buyer

   Want to sell a small business by owner? You’ll need to market your business creatively. Start by:

   
   

   • Listing on platforms like BizBuySell or LoopNet.

   • Reaching out to individual investors or searchers. Lone Rock Partners is one such buyer.

   • Leveraging local networks, like your chamber of commerce or business associations.

   • Tapping into Texas industry events and trade shows.

     
     

   • While brokers can handle the legwork, selling by owner means you control the process (and save on fees).

     
     

4. Streamline the Handover

   A buyer wants to step into something that’s ready to run. Ensure your systems, processes, and contracts are documented. If you can show buyers a turnkey operation, you’ll attract more offers—and faster ones.

   
   

Selling a Small Business By Owner in Texas

Going solo has its perks. You keep more of the proceeds, maintain control over negotiations, and can directly shape the deal. Here’s how to make it work:

• Leverage Texas-Specific Resources - The Texas Secretary of State and Comptroller’s Office have resources to help business owners navigate legal steps. Local Small Business Development Centers (SBDCs) also offer free or low-cost advice tailored to your area.

  
  

• Negotiate Like a Pro - Selling isn’t just about price; it’s about terms. Will the buyer pay upfront, or will you offer seller financing? Will you stay on during a transition period? Know your boundaries and be prepared to compromise.

  
  

• Keep It Confidential - Selling your business can make employees, customers, and competitors nervous. Be discreet. Use non-disclosure agreements (NDAs) with potential buyers to protect sensitive information.

  
  

Mistakes to Avoid When Selling a Business in Texas

1. Underestimating Taxes - Texas may not have state income tax, but federal taxes still apply. Work with an accountant to plan for capital gains and other tax liabilities.

2. Setting Unrealistic Prices - Overpricing can scare off buyers; underpricing leaves money on the table. Use comps and industry benchmarks to set a fair price.

3. Skipping Legal Help - A solid sales agreement protects you post-sale. Hiring a lawyer to draft or review documents is worth every penny.

   
   

The Final Word: Selling in Texas

Selling your business in Texas doesn’t have to be overwhelming. Whether you’re trying to figure out “How can I sell my business quickly?” or navigating the details of “how to sell a small business by owner,” preparation is everything.

Texas is a great place to sell—business-friendly policies, no personal income tax, and a diverse economy attract buyers from all over. With the right strategy and a little patience, you can close the deal and move on to your next adventure.

So, when you're ready to make the leap, remember: clarity, preparation, and local expertise will take you far.

Want to talk more about the specifics of business sales in Texas? I'm always happy to talk - drew@lonerockpartners.com