How to Sell a Business, Step by Step, and How Long It Takes
The short answer
Selling a small business usually takes 6 to 10 months from hiring an advisor to closing for businesses under $2M in enterprise value, and 11 to 12 months from $2M to $50M (IBBA and M&A Source, Q2 2026). The steps: get your records ready, value the business, market it confidentially, sign a letter of intent, get through 30 to 60 days of due diligence, negotiate the purchase agreement, then close and hand over.
How long it takes to sell a business
| Stage | Typical time |
|---|---|
| Main Street sale (under $2M enterprise value), engagement to closeSurvey of business brokers and M&A advisors, Q2 2026. | 6 to 10 months on average[1] |
| Lower middle market sale ($2M to $50M), engagement to closeThe $2M to $5M segment rose from 9 to 11.5 months in Q2 2026. | 11 to 12 months on average[1] |
| Due diligence, after the letter of intentExclusivity is usually set a little longer, for example 75 to 90 days when diligence is 60. | 30 to 60 days is typical for small business deals[2] |
| Preparation, before you hire an advisor or go to marketNot counted in the averages above, which start at engagement. How long it takes depends on how clean your books, contracts and leases already are. | No published range; depends on your records |
How to sell a business, step by step
1. Get your records ready
Pull together the documents a buyer will ask for first: financial statements, tax returns, and your contracts and leases. Separate personal and business spending, and list the add-backs you will claim. Records that do not reconcile are what slow a sale down later, in diligence.
The SBA tells buyers to examine financial statements, tax returns, and contracts and leases, with an attorney and an accountant.[3]
2. Find out what the business is worth
Get a value range before you talk to anyone, so you know whether an offer is reasonable. Multiples vary a lot by industry and size, so look at sales in your own sector and size band rather than a single rule of thumb.
Start with the free business value calculator: pick your industry, enter one earnings number, and get a range from closed sales in your sector and size band. No email needed.
3. Choose how you will sell and prepare the materials
Decide whether to use a broker or M&A advisor, or to sell to a buyer you already know. Prepare a short anonymous summary and a confidential information memorandum, and require a confidentiality agreement before you share names or financials.
4. Market the business confidentially and collect offers
Reach the likely buyers for your size of business: individual buyers, search funds, competitors, and private equity firms. More offers give you more leverage on price and terms.
Deals under $500K often get one or two offers; 87% of deals over $5M drew at least three in Q2 2026.[1]
5. Pick a buyer and sign a letter of intent
The letter of intent sets price, structure, financing, and an exclusivity period during which you stop talking to other buyers. Most of it is non-binding, but the exclusivity clause usually is.
Exclusivity is typically matched to the diligence period plus a cushion, for example 75 to 90 days when diligence is 60 days.[2]
6. Get through due diligence
The buyer, their lender, and their accountant check that the business is what you said it was. Answer requests quickly and completely: slow answers stretch the timeline and invite price cuts.
For small business deals, 30 to 60 days is typical.[2]
7. Negotiate the purchase agreement and financing
Lawyers turn the letter of intent into a purchase agreement: final price, what is included, warranties, any seller note or earnout, and your transition period. The buyer's lender finishes underwriting in parallel.
Sellers received 83% to 92% of the price in cash at close on average in Q2 2026; seller financing was under 10% of most deals.[1]
8. Close and hand over
Sign, fund, and transfer. Then help the new owner with customers, staff, and suppliers for the agreed transition period.
In an asset sale where goodwill attaches, both buyer and seller file IRS Form 8594 to report how the price is allocated.[4]
Example: what a buyer might pay
Example
A construction business with $750K of SDE sits in the $500K-$1M SDE band. Across 13 closed construction sales in that band, the median price was 2.73× SDE and the middle half sold for 1.94× to 2.92×. Applied to $750K, that is about $2.05M, with a middle range of $1.46M to $2.19M.
Illustration only, not a valuation. Source: Axia Growth analysis of 4,554 closed small-business sales over $500K, aggregated and de-identified. Data as of 2026-10-28. See all sectors in the multiples index.
What buyers check in due diligence
Due diligence is the buyer confirming that the business is what you described in the letter of intent. For small business deals it typically takes 30 to 60 days[2]. The SBA tells buyers to examine financial statements, tax returns, and contracts and leases, with an attorney and an accountant[3]. In practice, expect questions in these areas:
- Financials
- Profit and loss statements, balance sheets, and tax returns that agree with each other; your add-backs; and monthly revenue trends.
- Customers
- How concentrated revenue is, whether contracts transfer to a new owner, and how much revenue recurs.
- Owner dependence
- Whether customers, sales, and key decisions run through you, and who runs the business day to day after you leave.
- Contracts and leases
- Leases, supplier and customer agreements, and any change-of-control clauses that need a landlord's or customer's consent.
- People
- Key employees, pay, and whether they are likely to stay through the sale.
- Legal and compliance
- Licenses and permits, pending or past lawsuits, and ownership of trademarks, software, and other intellectual property.
- Assets and working capital
- Condition of equipment, inventory counts, and the working capital that will be left in the business at close.
Know your number before you talk to buyers
Get an instant value range from closed sales in your industry, then a detailed valuation if you want one.
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Questions
- How long does it take to sell a business?
- On average 6 to 10 months from hiring an advisor to closing for businesses under $2M in enterprise value, and 11 to 12 months for businesses from $2M to $50M, according to the IBBA and M&A Source Market Pulse survey for Q2 2026 (published August 25, 2026). Preparation before you go to market comes on top of that.
- What are the steps to sell a business?
- Get your records ready, find out what the business is worth, choose how to sell and prepare the materials, market the business confidentially, sign a letter of intent with one buyer, get through due diligence, negotiate the purchase agreement and financing, then close and hand over.
- How long does due diligence take when selling a business?
- For small business deals, 30 to 60 days is typical, according to Surge Business Law (March 11, 2026). Complex deals and deals with outside financing can run longer, and the exclusivity period in the letter of intent is usually set a little longer than diligence.
- What do buyers check during due diligence?
- Financial statements and tax returns, customer concentration, how dependent the business is on you, contracts and leases, key employees, licenses and legal matters, and the condition of assets and working capital. The SBA tells buyers to review financial statements, tax returns, and contracts and leases with an attorney and an accountant.
- How much of the price will I get in cash at closing?
- In Q2 2026, sellers received 83% to 92% of the price in cash at close on average, depending on deal size, and seller financing made up under 10% of most deals (IBBA and M&A Source Market Pulse, published August 25, 2026). The rest is usually a seller note, an earnout, or equity you keep.
- What makes a business sale take longer?
- Records that do not reconcile, a business that depends on the owner, customer or landlord consents, lender underwriting, and slow answers during due diligence. Larger deals also take longer: the $2M to $5M segment averaged 11.5 months in Q2 2026, up from 9 months.
Sources
- International Business Brokers Association and M&A Source, “The Market Pulse Survey Q2 2026 Reports the Latest Trends in Business Sales up to $50M,” published August 25, 2026.
- Surge Business Law, “Letter of Intent to Buy a Business: What to Include,” published March 11, 2026.
- U.S. Small Business Administration, “Buy an existing business or franchise,” accessed October 29, 2026.
- Internal Revenue Service, “About Form 8594, Asset Acquisition Statement Under Section 1060,” page last reviewed March 30, 2026.
Example figures: Axia Growth analysis of 4,554 closed small-business sales over $500K, aggregated and de-identified. Data as of 2026-10-28.
General information, not legal, tax, or financial advice. Averages vary by industry, deal size, and financing.
Cite this guide
Selling a small business usually takes 6 to 10 months from hiring an advisor to closing for businesses under $2M in enterprise value, and 11 to 12 months from $2M to $50M (IBBA and M&A Source, Q2 2026). The steps: get your records ready, value the business, market it confidentially, sign a letter of intent, get through 30 to 60 days of due diligence, negotiate the purchase agreement, then close and hand over. The steps to sell a small business, how long each one takes from prep to close, what due diligence covers, and what buyers check, with a source for every time range.
When using information from this guide, cite Axia Growth and link to this page.
Axia Growth. How to Sell a Business, Step by Step, and How Long It Takes. Updated 2026-10-29. https://axiagrowth.com/resources/how-to-sell-a-business