Exit Strategy: Selling Your Mobile Food or Catering Business
How to prepare and sell a food truck or catering business. Valuation basics, documents to gather, and transition steps.
Selling a food truck or catering operation is a major decision. This guide covers valuation, documents, and handover—not legal or tax details (get a lawyer and CPA). For ongoing financials, see Forecasting & Budgeting and Financial Tracking Template.
Valuation: SDE, Multiples, and Asset Sales
Buyers often look at revenue and profit. SDE (seller's discretionary earnings) is net profit plus add-backs (e.g. owner salary, one-time or personal expenses run through the business). Small food businesses are often valued at 2–4× SDE depending on size, growth, and risk. Example: $80k SDE × 2.5 = $200k valuation. Clean, documented books support a higher multiple. Get a professional valuation if the deal is significant.
Asset sale (truck, equipment, inventory, goodwill) is common: the buyer gets the assets and often the name; you keep the entity and settle liabilities. Entity sale (selling the LLC or corp) can be simpler but requires a clean company. Your attorney and CPA can advise on tax and liability. For ongoing financials before you sell, see Forecasting & Budgeting.
Documents: What to Gather and Tidy
Gather: Financials—P&L and tax returns (2–3 years), bank statements, and a simple summary of revenue and profit trends. Operations—permits and licenses, equipment list with condition and age, lease or location agreements, and supplier and key client relationships (where transferable). Liabilities—outstanding loans, contracts, and any known claims. Fix compliance issues and renew expiring permits before listing. Use our Licensing Guide and Food Safety Guide as checklists.
Sales Process: Stages and Timeline
Typical timeline: 3–12 months from listing to close. Plan for a transition period (e.g. 2–4 weeks) for training and introductions.
- Prepare: tidy books, permits, and documents; fix compliance issues.
- Value: get a professional valuation or use SDE/multiple benchmarks; set a realistic asking price.
- List: list with a broker, biz-for-sale site, or network; prepare a one-pager for serious buyers.
- Negotiate: share financials under NDA; negotiate price, terms, and transition.
- Close: attorney and CPA for sale agreement, transfer of assets/permits, and handover.
Transition and Handover
Plan a transition period for training the buyer, introductions to vendors and key clients, and transfer of permits where allowed. Put the sale terms, non-compete (if any), and handover schedule in writing. Coordinate with your attorney and the buyer's to close cleanly. Hand over: recipes and procedures, supplier contacts and accounts, key client contacts (with consent), and any passwords or systems the buyer will use.
Summary: document everything the buyer needs to run the business; agree on transition length and support; close with clear transfer of assets and permits.
Checklist: Before You List for Sale
- P&L and tax returns (2–3 years) are clean and available.
- Permits and licenses are current; renew or fix any expiring or non-compliant items.
- Equipment list with condition and age; note any leases or liens.
- Outstanding liabilities and contracts are documented; resolve or disclose.
- You have a one-pager or packet for serious buyers (financial summary, operations, growth potential).
- Attorney and CPA are lined up for valuation, sale structure, and closing.