The decision most owners make only once
Most owners of privately held companies sell a business exactly once. The buyer across the table, by contrast, may have closed dozens of transactions. That asymmetry — not valuation math — is the single biggest reason sellers leave money and terms on the table. Understanding the process before you are in it is how you close that gap.
Below is the sell-side process as we run it for founders and family-owned, middle-market companies: what happens at each stage, how long it takes, and where deals are actually won or lost.
Step 1: Preparation and positioning (1–3 months)
Before a single buyer is contacted, the work that most affects your outcome happens here: recasting your financials to adjusted EBITDA, documenting add-backs, resolving obvious diligence red flags, and building the story of the business — typically in a confidential information memorandum (CIM). A sell-side quality of earnings review at this stage surfaces problems while you can still fix them, instead of during a buyer’s diligence when every surprise costs price or trust.
Step 2: Going to market (2–3 months)
Your advisor builds a curated buyer list — strategic acquirers, private equity groups, family offices, and independent sponsors — and approaches them under NDA. The goal is a structured, competitive process: multiple parties reviewing the opportunity on the same timeline, so indications of interest (IOIs) arrive together and can be compared on price, structure, and fit.
Step 3: Management meetings and letters of intent (1–2 months)
Serious buyers meet management, tour facilities, and submit letters of intent (LOIs). The LOI sets headline price, structure (cash at close, rollover equity, earnouts, seller notes), exclusivity, and timeline. This is the point of maximum seller leverage — once you sign an LOI and grant exclusivity, leverage shifts to the buyer. Negotiate the terms that matter before you sign, not after.
Step 4: Due diligence (2–4 months)
The buyer’s accountants, lawyers, and consultants verify everything: financial, tax, legal, operational, environmental, and IT. Deals rarely die from what diligence finds; they die from what diligence finds that the seller did not disclose. Preparation in step one is what makes this stage boring — and boring is exactly what you want.
Step 5: Definitive agreements and closing (1–2 months)
The purchase agreement converts the LOI into binding terms — representations and warranties, indemnification, net working capital targets, and closing mechanics. Expect real negotiation here; this is where the fine print allocates risk between you and the buyer.
What the whole thing takes
A well-run sell-side process typically runs seven to twelve months end to end. Rushing compresses competition and weakens leverage; drifting exhausts buyers and management. The discipline of a timeline is itself a negotiating asset.
Common questions from owners
How long does it take to sell a business?
A well-run middle-market sale typically takes seven to twelve months from engagement to closing: one to three months of preparation, two to three months of marketing, one to two months to a signed letter of intent, and three to six months of diligence and documentation.
What is my business worth?
Most middle-market businesses are valued as a multiple of adjusted EBITDA. The multiple depends on size, growth, customer concentration, management depth, and industry dynamics — lower-middle-market companies commonly trade in the 4x–8x range, with premium businesses above that.
Should I tell my employees I'm selling?
Generally not until late in the process. Confidentiality protects employees, customers, and vendor relationships. Most sellers inform key managers under confidentiality when buyers need management meetings, and the broader team at or near closing.
Do I need an M&A advisor to sell my company?
You can sell without one, but sellers who run a structured, competitive process consistently achieve better price and terms than those who negotiate with a single buyer. An advisor also absorbs the enormous workload of a sale so the owner can keep running the business — deteriorating performance during a sale is a common and costly mistake.
What kills deals most often?
Surprises in diligence, declining performance during the process, and unrealistic valuation expectations. All three are addressable with preparation: recast financials honestly, keep running the business hard, and go to market with a defensible number.
What's the difference between selling to a strategic buyer and private equity?
Strategic buyers (companies in or near your industry) often pay for synergies and usually buy 100%. Private equity buyers frequently want owners to roll over 10–30% equity and stay involved, offering a 'second bite of the apple' when the business sells again. The right answer depends on your goals for money, legacy, and time.