How to Sell Your Business: 8 Steps, What It Is Worth, and How You Get Paid

How Much Could You Sell Your Business For?

A buyer pays a multiple of profit. Small businesses are usually priced on the owner's total earnings, and brokers report median multiples from 2.0 for the smallest deals to 4.5 above $5 million. Larger companies are priced on operating profit, and the multiple rises with company size and varies by industry.

The owner's total earnings, which brokers call seller's discretionary earnings, is profit plus the owner's own pay and perks, because the buyer of a small business usually steps into the owner's job. Operating profit, usually called EBITDA, is profit before interest, tax, depreciation and amortization, after paying someone else to do that job. It is the measure once a company has a management team, and multiples of it look higher because the earnings underneath them are smaller.

For companies with a management team, the investment bankers surveyed for Pepperdine University's 2025 Private Capital Markets Report reported median multiples by company size and industry. In business services they ran from 4.5 times operating profit for companies earning under $1 million to 7.5 times for companies earning $5 million to $10 million. Manufacturing climbed the same way.

A multiple is a starting point, not a price. Two companies with the same profit can sell for very different amounts, because each buyer marks the company down for what could go wrong once the owner has gone. That discount is where most of the price is decided, and it is the part you can change.

How to Sell Your Business in 8 Steps

Eight steps, in the order they happen: decide what you need, get a value range, fix what a buyer will discount, get the numbers ready, choose your buyer, choose who runs the sale, run a confidential process, and get through due diligence to closing. The first three decide most of the price, and they take the longest.

1. Decide What You Need From the Sale

Start with the amount you need to walk away with, not the price you would like to see announced. Work back from it: tax, the adviser's fee, any debt the business carries, and whatever part of the price will be paid later rather than at closing. If what is left does not fund what comes next, you need a higher price, a longer runway or a different plan.

Then settle the rest before a buyer asks. How long are you willing to stay after the sale, and in what role? Do you care whether your staff keep their jobs or the company keeps its name? Would you sell part now and the rest later?

Be clear about why. Retirement is the reason behind about two-thirds of the sales handled by the brokers in the Pepperdine survey. Buyers ask early, and the owner who says "I want to sell my business if the price is right" is the one they expect to walk away halfway through due diligence.

2. Get a Value Range Before You Pick a Price

Price is what ends most sales. The investment bankers surveyed said a median of 30 percent of their sale engagements finished without a deal, and the gap between what the buyer would pay and what the seller expected was the reason they gave most often. When a deal did fall apart over price, the gap was most commonly 21 to 30 percent of the asking price.

That is an owner who priced on what they need, and a buyer who priced the risk they found. So get an independent range early, from someone who values companies like yours and has no reason to flatter you. Then decide while it is still cheap: would you sell at the bottom of that range? If not, raise the value first, not the asking price.

3. Fix What a Buyer Will Mark You Down For

A buyer does not pay for last year. They pay for how safe next year looks once you have gone. Four things make it look risky:

• Revenue that depends on you. The largest customers buy because of the owner, or the owner closes every big deal.
• A few customers holding a large share of sales. Lose one after the sale and the buyer has overpaid.
• Revenue nobody can forecast. There is no repeatable way of winning customers, so next year is a hope.
• Numbers that do not match. The accounts, the tax returns and the sales records tell three different stories.

Each one is a discount, and each takes a year or two to remove, because the buyer wants to see the fix in the results, not in a plan. Few sellers give themselves that time. In the broker survey, 53 percent of sellers had done no formal planning before they hired a broker, and most of those who had planned started less than two years out.

Mark's exit planning work sets out how each kind of buyer weighs these risks. The first one is usually the largest. Founder-led sales covers how to hand the selling over, and when to hire a VP of sales covers the leader who lets a buyer see revenue that will not leave with you.

4. Get the Numbers and Documents Ready

Everything a buyer will ask for, in one place, before the first buyer asks for it:

• Three years of accounts that match the tax returns.
• Adjusted profit, with every add-back explained. An add-back is a cost that will not continue under a new owner, such as the owner's car or a one-off legal bill. Each one raises the price, so buyers test each one.
• Revenue by customer, product and month, taken from the sales system and matching the accounts.
• Customer and supplier contracts, leases, staff agreements, licenses, and anything you own on paper, such as trademarks.

Buyers of larger companies usually pay an accounting firm to check your earnings before they close, so find the problems first. A number that moves between the sales system and the accounts costs trust, then price. If sales and finance keep their own figures with their own definitions, revenue operations is the fix, and it is worth doing a year before a sale rather than during one.

5. Decide Who You Want to Sell To

Different buyers pay for different things, so decide who you are preparing for before you start fixing.

• A company buyer, often a competitor or a business in a related line, buying your customers, products or reach. Existing companies made 43 percent of the deals in the broker survey.
• A private equity firm, buying you as a base to grow from, or adding you to a company it already owns. Those add-ons made 19 percent of the brokers' deals, and private equity buyers became more common above $2 million.
• An individual buyer, usually for smaller businesses, often buying a job as well as a company.
• Your own managers, usually with borrowed money, for a lower price and far less disruption.

Who pays more? Half the investment bankers surveyed had seen company buyers pay a premium over financial buyers, most often 11 to 20 percent. It is not guaranteed, and it usually comes with harder questions about your contracts and how the business will fit into theirs.

6. Choose Who Runs the Sale

There are three options, and your situation mostly decides between them.

• Selling it yourself is the simplest way to sell a small business when you already know the buyer: a partner, a manager, or a competitor who has asked. You save the fee and lose the competition.
• A business broker markets the business to a wide pool of buyers, screens them and manages the paperwork. Brokers are not only for small companies: 72 percent of those surveyed were working on deals above $5 million.
• An investment banker or deal adviser usually handles larger companies, builds a targeted list of company and private equity buyers, and runs them against each other.

Should you use a broker to sell your business? If you do not already have the right buyer, usually yes. A good adviser earns the fee by reaching buyers you would never find, making them compete, and leaving you free to run the company. Ask anyone you interview how many deals like yours they closed last year, and who bought them.

7. Run a Confidential Process With More Than One Buyer

A sale runs in a set order, and each step gives a buyer more information only once they have earned it:

1. A short, anonymous summary goes to a list of likely buyers.
2. Interested buyers sign a non-disclosure agreement.
3. They receive a full information pack on the business.
4. The serious ones meet you and your managers.
5. They send first offers, and the best are invited further in.
6. One buyer signs a letter of intent, which sets the price and terms and usually gives them a period of exclusivity.

Your bargaining power is highest just before the last step and drops the day you sign, because from then on you cannot talk to anyone else. Keep two or more buyers in play until the terms in the letter of intent are ones you can live with. The best buyer may not be nearby: in the brokers' deals above $5 million, 82 percent of buyers were more than 100 miles away.

Keep it quiet for as long as you can. Staff, customers and competitors who hear too early can damage the very things the buyer is paying for.

8. Get Through Due Diligence, Close and Hand Over

Once the letter of intent is signed, the buyer checks everything: the accounts, the contracts, the customers, the staff and the legal position. The brokers surveyed reported a median of 8 to 9 months from listing a business to closing the sale, and 2 to 4 months of that came after the offer was signed.

Two things protect the price in those months. Keep running the business hard, because a weak quarter during due diligence gives the buyer a reason to lower the offer. And answer quickly and fully, because every slow or surprising answer makes the buyer wonder what else is there.

Then the handover. Agree before closing how long you will stay, in what role, and when staff and customers are told. A handover the buyer believes in also protects any part of the price paid later.

How Sellers Actually Get Paid

The headline price is what gets announced. What you receive depends on how that price is paid, and first-time sellers often agree to the terms that matter most without noticing them.

These terms are not rare. The investment bankers surveyed said seller financing was used to close 54 percent of their deals and rollover equity 50 percent, and 48 percent closed at a lower multiple. Most deals get done because the seller gives something.

Rollover equity deserves the closest look when the buyer is private equity. It can mean a second payment when the firm sells the company on, or a minority stake in a business you no longer control. Mark has been through three exits, one of them a nine-figure private equity rollup. Ask the questions in the table before the letter of intent is signed, because after that the buyer has little reason to change the answers.

Tax sits on top of all of this. Whether you sell the company's shares or its assets changes how much of the price you keep, and buyers and sellers often prefer opposite answers. Have your accountant model the after-tax result of each offer before you sign anything.

Common Mistakes When Selling a Business

Six come up again and again:

1. Waiting until you are exhausted. Owners who sell because they have run out of energy often sell after results have already started to slip.
2. Setting the price on what you need. The buyer prices risk, not your retirement.
3. Talking to one buyer. Without competition, the only thing holding up the price is your willingness to walk away.
4. Telling people too early. Staff and customers who hear rumors start making plans of their own.
5. Letting the business slip while you sell it. A sale takes most of a year, and the results during it are part of what is being bought.
6. Signing exclusivity before the terms are settled. Anything left vague in the letter of intent gets negotiated when you have the least power.

Frequently Asked Questions

How long does it take to sell a business?

The brokers surveyed for Pepperdine's 2025 Private Capital Markets Report put the median at 8 to 9 months from listing to closing, with 2 to 4 months of that after an offer is signed. Preparing the business to sell well usually takes one to two years before that.

Should I use a broker to sell my business?

Usually, unless you already have the right buyer. A good broker or deal adviser finds buyers you would not reach, creates competition between them and keeps the process moving while you run the company. Choose one who has recently sold companies like yours.

Can I sell my business quickly?

Yes, but speed usually costs price. A quick sale means fewer buyers, less competition and no time to fix what a buyer will discount. The fastest sales are usually to a buyer who already knows the business, such as a competitor, a partner or your own managers.

What is the difference between selling assets and selling shares?

In a share sale the buyer takes over the company itself, along with its history. In an asset sale the buyer picks the assets it wants and leaves the company behind. Buyers often prefer assets and sellers often prefer shares, because the tax falls differently. Ask your accountant to model both.

Do I have to stay on after the sale?

Usually for a while. Most buyers want the owner to help with the handover, and they want longer when part of the price depends on results after the sale. Agree how long you will stay, and in what role, before you sign the letter of intent.

When is the best time to sell a business?

When results are strong and still improving, and when you have had time to fix what a buyer will discount. Selling after a bad year, or because you are worn out, usually means selling for less. Start preparing one to two years before you want to sell.

Final Thought

Most of the price is decided before the sale starts, by what a buyer can mark you down for and how long you gave yourself to fix it. That is the U in Mark's UNLOCK Method, uncover the real constraints, applied to the one transaction most owners make only once. If a sale is two years away or less, Mark's exit planning work is built for exactly that window.