What to expect during the M&A process when you sell your business

The M&A process for selling a private company has seven stages: preparation, valuation, conversations with buyers, an offer, due diligence, a purchase agreement, and closing. In the 2026 Market Pulse survey of brokers and advisors, deals under $2 million took six to 10 months from engagement to close, and deals from $2 million to $50 million took 11 to 12.

You decided to look at selling, or an offer arrived before you were ready. Either way, you want to know what happens next, in what order, for how long, and what it asks of you.

What are the stages of the M&A process?

The stages run in a fixed order, and each one depends on the one before it:

1. Preparation: monthly financials you can defend, a clear picture of what the business earns without you, and the documents a buyer will ask for.
2. Valuation: an estimate of what the business could sell for, built from its earnings and from comparable sales (see how much to sell your business for).
3. Conversations with buyers: introductions under a signed NDA, in the stages described in how to qualify an M&A buyer.
4. Offer and letter of intent: written terms and, usually, a period of exclusivity (what happens after you accept a letter of intent).
5. Due diligence: the buyer checks what you told it, from financials to contracts to employees.
6. Purchase agreement: the contract that sets the price, the structure, and what you promise (asset sale or stock sale is decided here).
7. Closing and transition: money moves, ownership changes, and you may stay on for a handover.

How long does the M&A process take?

Longer for larger deals. The International Business Brokers Association (IBBA) and M&A Source asked brokers and advisors in July 2026 how long their completed deals took from engagement to close:

The survey's largest increase was in the $2 million to $5 million range, where the average rose from nine months to 11.5 months. It covered 255 respondents and 181 completed transactions, so read it as a guide to the market, not a promise for your sale.

The clock starts when the seller engages an advisor or broker. Work on your own numbers before that comes first, and it matters: the Exit Planning Institute reports that only 20 to 30% of businesses that go to market actually sell. Exit optionality covers how to prepare before you decide.

What do you do during due diligence?

Due diligence is the buyer checking what you told it, and your job is to answer questions, supply documents, and keep the business performing while you do. Buyers usually look at five areas:

A buyer's accountant often rebuilds your earnings from the records. When a buyer finances a purchase of $3 million or more with an SBA-backed loan, for example, the lender requires a quality of earnings review: an independent report that reconciles your statements to tax returns and bank data over the trailing 12 months and the last two fiscal years, and lists every adjustment to your reported earnings. A large customer concentration is the kind of finding a buyer prices in, so know yours before the buyer does.

Who is on your team?

You make the decisions, and you do the parts only an owner can do: you read the letter of intent, decide which terms matter to you, and sign. An M&A advisor prepares the numbers behind those decisions:

• Before the sale, the advisor values the business and prepares a quality-of-earnings review, the financial model, and the data room.
• When offers arrive, the advisor compares them side by side on price, structure, and what you would net, and prepares your negotiation with numbers. You decide and you speak for yourself.
• After a letter of intent, the advisor models each deal structure, reviews the buyer's financing, answers due diligence requests with you, and prepares the closing numbers and the transition plan.

Ask any advisor for fee terms in writing before you sign.

What can slow it down?

Most delays come from one of these:

• Buyer financing: a buyer that needs a lender adds the lender's valuation, review, and approval to your timeline.
• Approvals: a business with licenses, or one that sells in a regulated field, may need a regulator's consent before ownership changes, so find out early which approvals your licenses require and how long each takes.
• Regulatory filings on larger deals: a purchase valued above $133.9 million (the 2026 threshold, effective February 17, 2026) may require a premerger filing with the Federal Trade Commission and the Department of Justice. Smaller purchases do not trigger that filing.
• A dip in results: if sales slip while you are busy with the sale, a buyer may reprice or step back.
• Rigid terms: a firm position on price, timing, or your own role leaves little room to close a gap.
• A leak: employees or customers who hear about the sale from someone else.

What to do next

1. Pull together monthly financials that tie to your tax returns for the last two fiscal years and the current year to date.
2. List your customers by share of revenue, your key employees, and every agreement that exists only as a handshake.
3. Mark which of the seven stages affect you most, given your entity type, licenses, and leases, and note the dates and approvals each one involves.
4. Decide who on your team answers buyers' due diligence questions so they do not all land on you.

If you want help with steps 1 and 2, our M&A advisory work covers the valuation, the quality-of-earnings review, the financial model and data room, and the materials a buyer asks for. A fractional CFO (a part-time finance leader) can own the monthly close in the meantime: see whether your company needs one.

Questions owners ask

How much does it cost to sell a business?

Costs fall into three groups: professional fees, the taxes on the sale, and the hours you spend. Ask each professional for fee terms in writing before you hire them, and model the tax on each deal structure before you accept an offer, so you compare offers by what you would net.

What happens to you after closing?

The purchase agreement may ask you to stay for a transition period, as an employee or a consultant, and it may include a non-compete. Read those terms closely before you sign, and work out what each one costs you before the price is settled.