You are ready to sell, or close to it, and the advice arrives in pieces. This is the whole path in order, what each step asks of you, and how long it takes.
By Surfside Capital AdvisorsPublished 7 min read
To sell a business, decide why and when, prepare financials a buyer can check, set a value range, and choose the kind of buyer and help that fit. Then negotiate a letter of intent, get through due diligence, and close. In a 2026 survey of brokers and advisors, sales under $50 million averaged six to 12 months to close.
You have decided to sell, or you are close to deciding. Maybe a buyer called first, or you have picked the year you want to step back. Advice on how to sell a business tends to arrive in pieces: a broker's pitch, a friend's sale price, a buyer's email asking for your numbers. What you need is the order of the work and what each step asks of you.
Selling a business takes nine steps, and each one depends on the step before it:
Steps 1 to 3 happen before any buyer sees a number. This path is for a sale to an outside buyer; handing the business to family or managers over several years is closer to a succession plan, which runs on its own calendar.
Before a buyer sees your numbers, settle why and when you are selling, whether your financials hold up when someone checks them, and what range of value they support.
Start with what you want after closing: whether you stay and in what role, what happens to your team and your name, and how much of the price you need on closing day. Those answers decide which buyers and which terms fit you, and they are harder to work out once an offer is on the table. If you are weighing this year against next, read what waiting one more year to sell can cost.
Then prepare the numbers. Buyers pay for earnings they can count on after you leave, so the work is proving those earnings: monthly financials that tie to your tax returns and bank statements, each add-back (an owner expense a buyer would not carry) documented, and a clear view of how much depends on you and on your largest customers. A quality of earnings review is an analysis of your records that tests whether your reported earnings are accurate and likely to recur, and running one before you go to market lets you find the problems before a buyer does. How to increase business value before an exit covers the changes that take longest.
Last, set a value range. The U.S. Small Business Administration (SBA) advises using a business valuation "to set a monetary value before marketing to prospective buyers," and it names three approaches: income (projected revenue and its risks), market (recent sales of similar businesses), and assets (total assets minus liabilities). The valuation is a range, and the price comes out of negotiation. How much to sell your business for explains what moves a number within that range.
Most buyers fall into four groups, and the one that fits depends on the answers you wrote down in step 1:
| Kind of buyer | Who it is |
|---|---|
| Strategic buyer | An operating company, such as a competitor, supplier, or customer, that buys what fits its own business |
| Financial buyer | An investor, such as a private equity firm or a search fund, that buys cash flow and a plan to grow it |
| Individual buyer | A person who buys a company to run it |
| Insider | A partner, your managers, your employees, or a family member |
No type of buyer pays more by rule. What a buyer pays depends on your numbers and on what it expects to gain. Strategic or financial buyer compares what each one means for your team and for how the price is paid.
Buyers reach a business in one of three ways: they already know it, they contact the owner first, or the owner hires a firm to market the business, usually a business broker or an M&A advisor that runs a sale process. Which route fits depends mostly on your company's size and complexity, and business broker or M&A advisor lists the questions to ask either one, including how it is paid. Selling with no outside help is possible, and the risks of selling a business without an advisor shows where it tends to go wrong.
Whoever the buyer is, share in stages: financials only after a signed nondisclosure agreement (NDA), and customer names and prices only once the buyer has shown it can pay and decide. How to qualify a buyer sets out the checks for each stage.
After you accept a letter of intent, the buyer spends weeks to months checking your business while the final contract is drafted, and the price and terms can still move until closing.
A letter of intent (LOI) is a short document that sets out the main terms of a proposed purchase, such as the price, the structure, and how long you agree to deal only with that buyer, before the final contract is written. Before you sign one, compare every offer on what you would take home, how likely it is to close, and what you would still owe after closing. How to evaluate an offer for your business shows how to put offers side by side.
Due diligence is the buyer's check of everything you said about the business: financials, customers, contracts, employees, taxes, and operations. Your job is to answer requests quickly and keep results steady, because a dip in sales during diligence gives a buyer a reason to reprice. What happens after you accept a letter of intent covers exclusivity, the requests to expect, and why deals fail at this stage.
The purchase agreement is the final contract: it sets the price and structure, the promises you make about the business, and what happens if one of them turns out to be wrong. Whether you sell the company's assets or its shares changes your taxes and what stays your responsibility after closing, which asset sale or stock sale explains.
Not all of the price arrives on closing day. In the IBBA and M&A Source survey for the second quarter of 2026, cash at closing made up 83% to 92% of the price, depending on deal size, and the rest came as seller financing, earn-outs, or equity the seller kept. The agreement may also ask you to stay for a handover period, as an employee or a consultant.
Once the owner engages a broker or advisor, a sale of a company under $50 million averaged six to 12 months to close in 2026, and the larger sales took longer. The International Business Brokers Association (IBBA) and M&A Source asked 255 brokers and advisors in July 2026 about the 181 deals they had completed that quarter:
| Deal size (enterprise value) | Average time from engagement to close |
|---|---|
| Under $2 million (Main Street) | 6 to 10 months |
| $2 million to $50 million (lower middle market) | 11 to 12 months |
The survey's clock starts at engagement, so the preparation in steps 1 to 3 comes on top of it, and how long that takes depends on how ready your numbers already are. What to expect during the M&A process breaks the sale itself down stage by stage and lists what most often slows it.
If you want help with steps 2 to 4, our M&A advisory work covers the valuation, the quality-of-earnings review, the financial model and data room, and, later, the offer analysis and closing numbers. We advise and prepare you; we do not market your company, contact buyers, or negotiate or sign for you.
Do steps 2 and 3 anyway. Financials a buyer can check and a value range are useful whether you sell next year, in five years, or never, and they keep the decision yours if an offer arrives early. How to prepare to sell without deciding to sell covers what a buyer-ready business looks like.
The steps are the same, but the money and the calendar usually differ. The SBA describes a gradual sale, where ownership passes over time, as an option that "often benefits individuals that can't afford an outright sale." In a gradual sale you are in effect financing part of the price, so plan your own cash needs before you agree to one.
It depends on what you sell. The IRS treats the sale of a business's assets as a sale of each asset separately, so inventory, equipment, real estate, and goodwill can each be taxed differently, and buyer and seller both report how the price was split on Form 8594. Selling corporate stock usually produces a capital gain or loss instead. Model the tax on each structure before you accept an offer, so you compare offers by what you keep.
General information, not legal, tax, or investment advice.
Figures and rules as published by these sources on the dates shown.
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