Question 1

How long does it take to sell a business?

Accepted Answer

The typical timeline is 6 to 12 months from listing to close. Well-prepared businesses in high-demand industries can sell faster. I usually recommend 1 to 3 months of preparation before going to market — addressing financials, operations, and positioning — which often results in a significantly higher sale price. Read more about the process in my blog post on preparing your business for sale.

Question 2

What does a business broker do?

Accepted Answer

A business broker manages the entire sale process: valuation, confidential marketing, buyer screening, negotiations, due diligence management, and closing coordination. As an M&A advisor, I also help owners prepare their business before going to market to maximize value. Unlike a real estate agent who lists and waits, I take an active role in fixing what costs you at the negotiating table.

Question 3

How much does it cost to hire a business broker?

Accepted Answer

Most business brokers work on a success fee basis, meaning you only pay when the deal closes. The typical commission ranges from 8% to 12% for smaller deals and uses a tiered or Lehman formula for larger transactions. There is usually no upfront cost, which means your broker is fully incentivized to get you the best price. I am happy to walk through my fee structure on a call.

Question 4

What happens during due diligence?

Accepted Answer

Due diligence is the buyer's deep dive into your business after a Letter of Intent is signed. They will review financial statements, tax returns, contracts, leases, employee agreements, customer data, and operational processes. This phase typically lasts 30 to 90 days. Having clean, organized records is critical — it is one of the biggest factors in whether a deal closes or falls apart.

Question 5

Do I need to tell my employees I'm selling?

Accepted Answer

Not until the deal is close to closing, and sometimes not until after. Confidentiality is one of the most important aspects of selling a business. If employees, customers, or vendors find out prematurely, it can destabilize the business and tank the deal. I use strict NDAs and confidential marketing to protect you throughout the process.

Question 6

What is a Letter of Intent (LOI)?

Accepted Answer

A Letter of Intent is a non-binding document where a buyer outlines the proposed terms of the deal — purchase price, deal structure, contingencies, and timeline. It is not a contract, but it signals serious interest and kicks off due diligence. You may receive multiple LOIs, and I help you evaluate which offer gives you the best overall outcome, not just the highest number.

Question 7

Can I sell my business if it's not profitable?

Accepted Answer

It is more difficult, but not impossible. Some buyers look at revenue, strategic value, customer base, intellectual property, or market position rather than pure profit. Turnaround buyers and strategic acquirers may see opportunity where others do not. That said, improving profitability before going to market — even modestly — can dramatically expand your buyer pool and increase what you walk away with.

Question 8

How much is my business worth?

Accepted Answer

Business valuations depend on industry, revenue, profitability, growth trends, owner dependence, customer concentration, and other factors. Most small to mid-size businesses sell for 2x to 5x their Seller's Discretionary Earnings (SDE) or EBITDA. Browse my valuation multiples guide for 95+ industries or schedule a free consultation for a personalized assessment.

Question 9

What is SDE (Seller's Discretionary Earnings)?

Accepted Answer

SDE stands for Seller's Discretionary Earnings. It is the total financial benefit a single owner-operator takes from the business — net profit plus owner salary, perks, one-time expenses, and non-cash charges like depreciation. SDE is the standard valuation metric for owner-operated businesses typically valued under $5 million. It answers the question: how much does this business actually put in the owner's pocket?

Question 10

What is EBITDA and how is it different from SDE?

Accepted Answer

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is used for larger businesses where the owner is not the primary operator. The key difference: SDE adds back the owner's salary and benefits, while EBITDA does not. EBITDA is typically used for businesses valued above $5 million or those with professional management teams in place. Check my valuation guide for multiples in your industry.

Question 11

What are valuation multiples?

Accepted Answer

A valuation multiple is a ratio used to estimate business value — most commonly expressed as a multiple of SDE or EBITDA. For example, if your business earns $500K in SDE and similar businesses sell at a 3x multiple, your estimated value is $1.5 million. Multiples vary significantly by industry, size, growth rate, and risk factors. My valuation multiples guide covers 95+ industries.

Question 12

How can I increase my business valuation?

Accepted Answer

The biggest value drivers are: reducing owner dependence by building a management team, diversifying your customer base so no single client represents more than 15% of revenue, documenting all processes and SOPs, showing consistent revenue growth, cleaning up your financials, and securing long-term contracts or recurring revenue. Even 6 months of focused preparation can increase your valuation by 20% to 40%.

Question 13

Who buys businesses?

Accepted Answer

Buyers fall into several categories: individual operators looking to buy a job or a first business, serial entrepreneurs acquiring their next venture, private equity firms building portfolio companies, search fund operators backed by investors, strategic acquirers (companies in your industry buying competitors or complementary businesses), and family offices. I have access to a network of 19,000+ vetted buyers across all categories.

Question 14

What is an earnout?

Accepted Answer

An earnout is a portion of the purchase price that is contingent on the business hitting certain performance targets after the sale closes. For example, a buyer might pay $3 million at closing plus an additional $500K if the business reaches specific revenue milestones over the next two years. Earnouts can bridge a valuation gap between buyer and seller, but they need to be structured carefully to protect your interests.

Question 15

What is seller financing?

Accepted Answer

Seller financing means you, the seller, act as the lender for a portion of the purchase price. The buyer pays you over time — typically 3 to 7 years — with interest. This is extremely common in small business sales, often making up 10% to 30% of the deal. It can actually benefit you: it expands the buyer pool, often gets you a higher total price, and provides ongoing income with interest.

Question 16

Will the buyer keep my employees?

Accepted Answer

In most cases, yes. Buyers want to keep the team that makes the business run, especially key employees. Retaining staff is often a condition of the deal. That said, buyers may make changes over time. If protecting your employees is important to you — and it is for most sellers — we can address this during negotiations and build retention incentives or commitments into the deal structure.

Everything you need to know about selling a business

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