# Selling Your Business to an Employee

Educational map for Northern Colorado owners considering a sale to one employee, a management team, or a broader employee-ownership structure. Not personalized advice and not a transaction plan.

Yes, a fee-only advisor can help connect a proposed internal sale to the owner’s personal finances. The transaction still needs qualified legal, tax, and valuation professionals, and, where relevant, a lender or employee-ownership specialist. Vital Investment Management, LLC (CRD #300811) coordinates; it does not broker sales or replace those specialists.

## Why owners sell to a key employee

Owners look at a key employee when they want the company to keep its people, customers, and name without a wide auction. The buyer already knows the work. That is not automatically easier money. The employee still has to fund the purchase, and the household still has to replace owner pay.

## Valuing an internal sale (SDE vs EBITDA)

Seller’s discretionary earnings (SDE) and EBITDA are different earnings measures. Neither is a sale price. An internal buyer and a third-party buyer may not start from the same number. A qualified valuation professional chooses the method.

## Financing

Purchases may mix buyer cash, bank financing including an SBA 7(a) loan, seller financing, and earn-outs. Eligibility for any loan is a lender and SBA question. Vital does not make or broker loans.

An ESOP is a qualified retirement plan designed to invest primarily in employer stock. A trust holds shares for participating employees. That is not the same as selling stock or assets directly to one employee.

HTML: https://vimsmallbusiness.com/resources/sell-your-business-to-an-employee/
Related: https://vimsmallbusiness.com/services/transition/
Exit article: https://vimsmallbusiness.com/resources/exit-as-a-multi-year-project/
Guide: https://vimsmallbusiness.com/resources/transition-succession-guide/
Discovery: https://VIMadvisor.as.me/SmallBusinessConsultDillonGoodman
Reviewed by Dillon Goodman, CPA, CFP®. Published 2026-09-15.