Why most business sales fail — or disappoint
The majority of businesses listed for sale never close. Of those that do, many sell below the owner’s expectations or to the wrong buyer — eroding the legacy and culture the owner spent years building. The reasons are predictable: poor preparation, undifferentiated positioning, and a buyer pool that was too wide or too shallow.
Selling a business is not the same as listing a property. A great exit requires active sourcing, buyer qualification, and precise commercial positioning — not passive advertising and hoping the right person finds you.
Step-by-step: how to sell a business
Get a realistic business valuation
Before you go to market, you need to know what your business is worth — and why. Valuation is driven by EBITDA multiples, revenue quality, customer concentration, growth trajectory, and sector benchmarks. A business valued at 3× EBITDA and one valued at 7× EBITDA can look identical on the surface; the difference is in how the story is told and to whom.
Prepare your financials and business documentation
Buyers will conduct due diligence. Your financials need to be clean, reconciled, and defensible for at least the last three years. Addbacks, owner remuneration, and non-recurring costs should be clearly documented. Surprises in due diligence kill deals — or renegotiate them downward.
Define your ideal buyer profile
Not every buyer is the right buyer. Private equity firms, strategic acquirers, independent sponsors, and individual buyers have very different motivations and timelines. Matching your business to the right buyer type is critical to getting your deal done at the right price — and the right terms.
Position and market your business confidentially
Going to market too broadly — or publicly — can destabilise your business. Employees, customers, and competitors learn you’re selling before a deal is done. Quality M&A advisors work confidentially, sharing information only with pre-qualified buyers who have signed NDAs and demonstrated genuine acquisition intent.
Qualify buyers and run a structured process
A structured process creates competitive tension — which protects your price. Running a disciplined timeline with multiple qualified buyers means you’re negotiating from strength, not desperation. Your advisor should be managing this process actively, not just making introductions.
Negotiate terms, not just price
Price is only one dimension of a deal. Earnouts, rollover equity, transition periods, warranties, and indemnities all affect what you actually receive — and how much risk you retain. A good advisor ensures the full deal structure, not just the headline number, works in your favour.
Due diligence, legal, and close
Once heads of terms are agreed, due diligence begins in earnest. Legal documentation follows. This phase is where deals most commonly fall over. Having advisors and legal counsel who have been through this process repeatedly keeps the deal on track and protects you at the close.
What makes a business easy to sell?
The best businesses to sell share common characteristics that buyers value and pay premiums for:
- Recurring or contracted revenue streams
- Strong EBITDA margins with clear financial history
- No single customer representing more than 20–25% of revenue
- Management in place that operates independently of the owner
- Clear growth pathways the acquirer can execute
- Clean, auditable financials
- Defensible market position in a sector with acquisition appetite
If your business doesn’t yet tick all of these boxes, it doesn’t mean you can’t sell — but it does affect pricing and the buyer pool. Good M&A advisors help you understand how to position what you have to maximise value.
How long does it take to sell a business?
For a lower-middle-market business ($500K–$50M enterprise value), a well-run sale process typically takes 6–12 months from engagement to close. Larger transactions take longer. Rushing the process generally results in worse outcomes — lower prices, fewer competing bids, and weaker terms.
The fastest deals happen when a business is well-prepared before going to market — not when an owner simply wants out quickly.
Should I use a business broker or an M&A advisor?
Business brokers and M&A advisors serve different markets and operate differently. Traditional business brokers typically list businesses on marketplaces and wait for inbound enquiry — appropriate for smaller transactions ($500K and under) where the buyer is often an individual.
M&A advisors — like Berngate — actively source and qualify institutional and strategic buyers. This matters for businesses with enterprise values from $500K upward, where the right buyer is a PE firm, family office, independent sponsor, or strategic acquirer — not a browser on a listing site.