How selling a business actually works
Most owners expect it to take a few months. The real process usually takes three years or more, and most of that time is preparation.
The odds
of businesses that go to market actually sell.
median time on the market once a business is listed.
of preparation before listing, for businesses that sell well.
The path from "not started" to "sold"
Seven milestones. The first two take the longest, and they decide how the rest goes.
- You are here
Not started
Most owners have no written plan and have never had a valuation.
Books cleaned up
Three years of statements, tax returns and bank records that agree with each other. Personal expenses out.
1 to 2 yearsBusiness runs without you
Processes written down, a team that makes decisions, customers who know your staff by name.
1 to 2 years, often alongside the booksValuation
Priced on a multiple of earnings. The multiple rises with clean books and falls with owner dependence.
2 to 3 weeksBuyer found
Confidential listing, screening, and a signed letter of intent on price and terms.
Median 6 monthsDue diligence
The buyer and their lender verify everything. This is where unprepared deals fall apart.
30 to 90 daysBusiness sold
Closing, then a training period and often a seller note paid over the next few years.
Weeks to a year after close
Why deals fall apart
The reasons are the same across brokers, lenders and exit planners.
- Financial records that are incomplete, out of date, or don't match the tax returns.
- An asking price the numbers don't support.
- A business that depends on the owner's presence, skills or relationships.
- An owner who isn't fully committed, or who closes the doors instead of attempting a sale.
- Unresolved problems, such as a lease that can't transfer, a legal dispute, or deferred maintenance.
What buyers will ask you for
Due diligence is a long request list. Seeing it early is the point of preparing.
Financials
Monthly profit and loss, tax returns and bank statements for three years, reconciled to each other. Support for every expense you call personal or one-time.
Customers
Your top ten customers and each one's share of revenue. Contracts, and whether they transfer to a new owner.
Contracts and legal
The lease and its assignment terms, supplier agreements, licenses, permits, loans, liens, and any disputes.
People and operations
Key employees and their pay, who knows how each system works, and your written commitment to a transition period.
A note on price
Small businesses are priced on a multiple of earnings, and the average multiple for businesses sold in 2025 was about 2.6 times. Where a business lands in the range depends on how much it relies on the owner, whether one customer makes up a large share of revenue, and how well the books hold up to review. The same business can be worth meaningfully more after two years of preparation.
Not sure where your business stands? Take the quick self-check and see what buyers and successors look for.
Start the process
Take the checklist with you, or talk it through with us.