How to Sell a Business: The Owner Sequence From First Thought to Close, Starting 24 Months Out

By Andreas Pettersson, Founder, Leaders ADAPT

The thought arrives on an ordinary Tuesday. You have run the company for fifteen years, you tried a general manager once and it did not work, and between the third fire of the morning and the fourth you think it clearly for the first time. I want to sell my business. The next thing most owners do is search for a broker. That is step four. This page is about steps one through three, and what happens if you skip them.

I have sold a company. I built Arcules from zero to over 150 people and sold it to Canon, then ran a Canon company as its youngest standalone CEO. The hardest part was not the deal. It was the two years before it, making the company something a buyer would pay for rather than something only I could run. This page comes from that, and from the owners I work with who are 12 to 24 months from a sale.

Selling a business well is a sequence, not an event. The sequence starts 24 months out, with the owner, not the broker, and the order in which you hire your help matters as much as who you hire.

The owner sequence, phase by phase

Most guides on how to sell a business start at the broker's door. By then the price is mostly set. Here is the whole sequence, as I run it with owners, with the test that says each phase is done.

Two things about the table. The first two phases are the ones nobody searches for, and they decide the number at the bottom right. And the dates are a plan, not a promise. A company already run by a leadership team can compress the first year. A company that lives in the owner's head cannot, no matter how good the broker.

The first year: readiness, then preparation

Readiness, 24 to 12 months out. This phase has one job. Make the company something a buyer is buying, rather than something you are leaving.

Start with the why. Owners who sell for a clear reason hold their position in the negotiation. Owners who sell because they are tired accept the first number that makes the tiredness go away. Write the reason down. You will reread it in month 20.

Then get an outside read. Not a valuation yet, a readiness read. Our exit readiness engagement looks at three things a buyer will look at: whether the leadership team can run the company without you, whether the operations survive your absence, and whether the technology is an asset or a liability. The result is a short list of what to fix in the next twelve months, in priority order.

Most of that list is about you. In nearly every owner led company I see, the owner is the sales team, the pricing authority and the only person who knows why the margin moved last quarter. That is key person risk, and buyers price it. The fix is a second in command and a leadership team that meets without you, which is why I say the readiness phase is leadership work before it is finance work. Our leadership team development work exists for this exact twelve months.

The Exit Planning Institute's generational data says how rare this preparation is. Among baby boomer owners, more than half plan to exit within five years, yet only 27 percent have had a formal valuation and 5 percent have a dedicated exit planning team (Exit Planning Institute, August 2025). The owners in that other 95 percent are the ones who hire a broker first and discover the readiness problem in diligence.

Preparation, 12 to 6 months out. Now the numbers. Buyers in the lower middle market pay a multiple of EBITDA, so every dollar of EBITDA you can prove is worth several dollars of price. Every dollar you cannot prove is worth nothing, and it costs you credibility on the dollars you can.

The work, in order. Close the books monthly, on a calendar the whole company can see, and get three clean closes in a row. Separate owner expenses from the business and document every add back. Map customer concentration, gross margin by line and the contracts that would need consent to transfer. Then run a sell side quality of earnings. The buyer will run one in diligence regardless. Running yours first means you set the EBITDA figure the negotiation starts from, instead of defending a figure the buyer's accountants have already cut.

This is also when you form your own view of the number. Our how much is my business worth page covers the methods. The IBBA Market Pulse for Q2 2026 puts the median multiple for completed deals in the $5M to $50M range at 5.8 times EBITDA, up from 4.8 in Q2 2023, and 4.0 times EBITDA for $2M to $5M deals (IBBA Market Pulse, Q2 2026 Highlights, published August 2026). Below $2M the market prices on seller's discretionary earnings instead, at 2 to 3.1 times. Those are medians across every industry. Your number depends on growth, margin, concentration and how much of the company is you.

The full list of what to fix before a buyer looks is on our prepare business for sale page. The short version: a buyer will find every soft spot in diligence, so find them yourself first, while you can still do something about them.

Who you hire, and in what order

Most owners hire a broker, then an accountant, then nobody for the leadership problem. The order that protects the price is the reverse.

First, the readiness read. Before anyone outside the company knows you are thinking about it. This is the only hire whose job is to tell you whether to sell at all, or whether twelve months of work would change the number by more than the work costs. Everybody you hire after this point is paid when a deal closes, and that shapes their advice.

Second, the quality of earnings. An independent accounting firm, hired by you, six to nine months out. They produce the report your advisor will market from and your buyer will test against.

Third, the broker or M&A advisor. Hire them when the company runs without you and the numbers hold up. Our business broker vs M&A advisor page draws the line in detail. In short, a business broker lists a smaller company and finds an individual buyer. An M&A advisor runs a competitive process for a company with real EBITDA and brings strategic buyers and private equity to the table. The IBBA chairman described the Q2 2026 market this way: above $2 million, strong businesses are still drawing meaningful competition, while at the smallest end buyers hold the stronger hand and are more sensitive to financing, margins and operating risk. Competition is what an advisor sells you. It only exists for a company that is ready.

Alongside, your deal lawyer and tax advisor. Bring them in before the letter of intent, not after. Asset or stock sale, price allocation and earnout treatment decide how much of the headline number you keep.

Go to market, diligence and close

Once you have an advisor, the process has a shape. A teaser without your name goes to a buyer list. Interested buyers sign a confidentiality agreement and receive the information memorandum. You present to the serious ones, indications of interest come in, and one buyer signs a letter of intent. Then exclusivity and diligence.

Diligence is where unprepared owners lose the deal or the price. The buyer's team asks for everything, in a data room, on a schedule, and every finding that surprises them is a reason to renegotiate. The test is simple. Nothing in diligence the buyer did not already hear from you. If you did the preparation phase, that is achievable. If you did not, this is where you find out.

Then the purchase agreement. Working capital peg, escrow, representations, non compete, your transition role, and any deferred price. The IBBA data for Q2 2026 shows that in the $5M to $50M segment, 83 percent of the price was paid in cash at close, with the balance split across seller financing, earnouts and retained equity (IBBA, Q2 2026). Our earnout page explains what the deferred part means in practice. The one sentence version: a large earnout is the buyer telling you they do not believe your forecast, or that they think the company still depends on you. Either way, it is a readiness finding arriving late.

The two mistakes that cost the most

I see the same two, in companies of every size.

Going to market before the company runs without you. This is the expensive one. The owner tried a general manager once, it failed, it still stings, and rather than try again he decides to sell. What he does not see is that the failed hire did not go away. It is now priced into the offer. A buyer who sees a company that depends on the owner answers with a lower multiple, an earnout, a two year transition, or all three. The twelve months he did not want to spend building a second in command come back as a discount, and the discount is usually larger than a year of a good executive's salary. Our page on what buyers look for in a management team lists what they test.

Getting ahead of the deal. The first indication of interest arrives and the owner spends it in his head that night. From that moment he cannot walk away, and buyers can feel it. Every renegotiation in diligence lands, because the alternative, no deal, has become unthinkable. The fix is boring. Keep running the company as if there is no sale until the wire lands. Keep the number you wrote down in the readiness phase. And have someone on your side of the table who is not paid on close and will tell you when to stop.

A third, smaller one. Telling the team too early, or too late. Too early and the best people start looking. Too late and the buyer meets a team that feels ambushed. Agree the communication plan before the letter of intent.

Where AI fits in a sale

Three places it helps, and one place it does not.

It helps in preparation. Indexing contracts, pulling customer concentration, drafting the first information memorandum from your own numbers, and flagging the inconsistencies a buyer's analyst would find. A team trained on these tools does in weeks what used to take a quarter.

It helps in diligence. A well built data room with a company knowledge system behind it answers the buyer's questions faster and more consistently than a tired owner at eleven at night. For companies running on EOS, our AI for EOS companies guide covers how this fits the quarterly rhythm, and a buyer notices a company that runs on a system.

It helps the buyer too. Their team is using the same tools to find your soft spots. Assume nothing in your numbers goes unread.

Where it does not fit is the decision. Whether to sell, to whom, at what number, and when to walk away. Our page on what not to delegate to AI is the longer version. The sale of a company you built is the clearest case I know of a decision that stays with the person who has to live with it.

What a good process does not fix

A good broker or advisor does not fix a company that depends on you. They can describe it well. They cannot make it true.

A quality of earnings does not fix thin margins or one customer at 40 percent of revenue. It documents them so you can explain them. Fixing them is a year of operating work before the report is written.

A strong market does not fix a weak company. The 2026 data shows competition for strong businesses above $2 million and buyers holding the stronger hand below it. The word that matters is strong.

And no amount of excitement about the next chapter fixes a company you have not yet made ready for it. The landing spot I want every owner to reach is not "sell now." It is "I know whether I am ready for the exit I am now excited about." Sometimes the honest answer is yes, go. Often it is twelve more months, with a plan, and a much better number at the end of them.

Who is on the bench for this

Steve Shaw is the fractional CFO on the Leaders ADAPT bench. Steve has twenty years in finance leadership and works with owners on clean books, cash discipline, financial positioning before a sale, and the numbers conversation with buyers and lenders. In the preparation phase, he is the one who gets the books to the point where the quality of earnings firm has little to find.

Thor Legvold is the leadership psychologist on the bench. When the readiness read shows the owner is the company, Thor works on executive fit, team dynamics and the people decisions behind a sale, including who the second in command should be and whether the current team can carry a buyer's expectations.

Sergey Dmitriev is the fractional CTO and AI systems partner on the bench. When the technology stack, the data room or the company knowledge system needs to be built or cleaned up before a buyer looks, Sergey builds it, and trains the leadership team with me on the tools.

Every engagement runs through Leaders ADAPT. I take the first call, match the partner, and stay in the room until you decide whether to go to market.

How to sell a business FAQ

How long does it take to sell a business?

Plan on 24 months from the first serious thought to the wire transfer, and 6 to 12 of those months with the company actually on the market. The first year is readiness and preparation work that happens before anyone outside the company knows. The market phase, diligence and close take most of the second year. Owners who skip the first year usually add it back later, in a lower price or a dead deal.

What is the first step to sell my business?

The first step is a readiness read, not a valuation and not a broker. You want to know three things before anyone else looks. Does the company run without you for a month. Do the numbers survive a stranger pushing on them. Is there a leadership team a buyer would pay for. The answers decide whether you go to market in six months or spend a year fixing the business first.

Should I use a business broker or an M&A advisor?

It depends on the size of the company and the kind of buyer you want. Business brokers mostly serve companies that sell for under about $2 million to individual buyers. M&A advisors run a competitive process for companies with meaningful EBITDA and sell to strategic buyers and private equity. Interview both, ask who they sold to last year, and hire after your readiness work, not before.

Do I need a quality of earnings before selling my business?

For a company above a few million in revenue, yes, a sell side quality of earnings is worth the fee. The buyer will run one anyway. Running yours first means you find the soft spots in your numbers, fix or explain them, and set the EBITDA figure the negotiation starts from. Owners who skip it usually meet those findings in the last month of diligence, when every surprise costs money.

What are the most common mistakes when selling a business?

Two mistakes do most of the damage. Going to market while the company still depends on the owner for sales, pricing and key relationships, which buyers price as risk. And getting emotionally ahead of the deal, spending the proceeds in your head, and losing the ability to walk away. A third is hiring the broker first and doing the readiness work never.

What is an earnout and should I accept one?

An earnout is part of the price paid later, only if the company hits agreed targets after the sale. Buyers use it when they do not fully believe your forecast, or when the company depends on you. In the IBBA Q2 2026 data, earnouts were a small share of financing in the $5M to $50M segment, with most of the price paid in cash at close. A large earnout is a signal that your readiness work is not done.

Can I sell my business if it depends on me?

You can, but you will sell it for less and with more strings attached. A company that cannot run a month without the owner is priced for the risk that the owner leaves and the customers follow. Buyers answer that risk with a lower multiple, an earnout, a long transition period, or all three. Twelve months of building a second in command and a leadership team usually pays back several times over.

Start with the month you are not there

If you are wondering how to sell your business, do not start with a broker or a number. Start with a question. What happens if you take the next four weeks off, phone off, and come back. If the honest answer is that sales stall, pricing stops, and three customers call you personally, you have found the first item on the readiness list, and it is you.

Tomorrow morning, write down three things: why you want to sell, the number you want, and the three reasons a buyer would pay less than that. If you can write all three reasons, you are closer than most. If you cannot, that is what the first conversation is for.