Question 1

How much is my business worth?

Accepted Answer

Value in the lower middle market is primarily driven by normalized earnings (SDE or EBITDA) multiplied by a market-driven multiple. That multiple reflects perceived risk, growth potential, owner dependency, and the quality of your financials and management team. Cleaning up your financial presentation and reducing key-person risk can meaningfully improve your multiple before you go to market.

Question 2

What documents do I need to sell my business?

Accepted Answer

At minimum: three years of financial statements and tax returns, key customer and vendor contracts, corporate formation documents, and employee records. How organized and accessible these are matters as much as having them. Buyers expect to see a clean data room during due diligence.

Question 3

How long does it take to sell a business?

Accepted Answer

Most small business sales take 9 to 18 months from the decision to sell through closing. That timeline includes preparation (3 to 6 months), marketing and buyer outreach (3 to 6 months), due diligence and negotiation (2 to 4 months), and closing. Owners who prepare in advance consistently close faster and on better terms.

Question 4

Do I need a broker to sell my business?

Accepted Answer

Not always. For most owners in the $1M to $25M revenue range, a skilled broker significantly improves the outcome. The more important question is how to evaluate brokers, what red flags to look for, and how to structure the engagement. An educated seller makes a much better client and a harder target for advisors who take advantage of unprepared owners.

Question 5

What is due diligence and how do I prepare for it?

Accepted Answer

Due diligence is the buyer's structured review of your financials, legal documents, operations, and contracts. It is where most deals slow down or fall apart, almost always because of the seller's preparation, not the business itself. Organized records, clean financials, and advance knowledge of what buyers look for makes due diligence manageable.

Question 6

How do I know when it is the right time to sell my business?

Accepted Answer

Good timing requires alignment across three things: personal readiness, business readiness, and market conditions. Most owners only think about the market and miss the first two. The right time is rarely when you need to sell. It is when you have done the preparation to sell well.

Question 7

What is SDE and how does it affect my business valuation?

Accepted Answer

SDE stands for Seller's Discretionary Earnings. It is your net profit plus the owner's salary, personal expenses run through the business, depreciation, and other non-recurring items. It represents the total financial benefit an owner-operator receives from the business. Most small business valuations in the $500K to $5M range are based on a multiple of SDE.

Question 8

What happens if I receive an unsolicited offer to buy my business?

Accepted Answer

An unsolicited offer is not a reason to rush into a deal. It is a reason to get educated quickly. You should understand your options before responding: whether to engage the buyer directly, bring in a broker to run a competitive process, or decline. Most unsolicited offers come in below market value. A competitive process almost always produces better terms.

Question 9

How do I prepare a business for sale?

Accepted Answer

Preparation typically takes 12 to 24 months and includes cleaning up your financials, documenting your operations, reducing owner dependency, resolving any legal or compliance issues, and organizing your key contracts and records. Owners who prepare in advance consistently achieve better multiples and close faster than those who rush to market.

Question 10

What resources are available to help me sell my small business?

Accepted Answer

Due Dilly offers a free 7-lesson crash course covering valuation, timing, brokers, due diligence, and deal structure. The full course includes 13 modules, 7 professional templates, and advisor matching. The SBA SBDC network also provides free one-on-one advisory services for business owners preparing to sell.

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