How to Sell a Business
The step-by-step process, how long it takes, and where the value is won or lost.
Selling a business moves through five stages: preparation and valuation, building the data room, going to market to a wide buyer universe, letters of intent, and due diligence to close. Done as a run process rather than a single negotiation, it protects your leverage and drives the price.
Key takeaways
- How to sell a business: prepare it, value it, take it to many qualified buyers under NDA, run them to competing offers, then convert the strongest into exclusivity and close.
- Preparation is the highest-return step: the issues fixed before go-to-market are the ones that would otherwise chip the price in diligence.
- A competitive process protects leverage: several buyers advancing in parallel keeps the seller in control until exclusivity.
- Timeline: a letter of intent typically arrives 45-60 days into active marketing, and the sale closes in 4-6 months on average, and in no more than 9 months.
- The letter of intent is the pivot: it grants exclusivity, so the terms locked in before signing it matter most.
Last updated: July 2026 · Reviewed by the FISART senior team
5 stages
45-60 days to LOI
4-6 months
$1M-$100M revenue
How to sell a business: the process at a glance
To sell a business you prepare it, price it, market it confidentially to a wide universe of qualified buyers, run those buyers to competing offers, and then convert the strongest bid into an exclusive deal you take through due diligence to close. The discipline is keeping several buyers moving in parallel until exclusivity, so leverage stays with the seller.
In a prepared FISART process, a signed letter of intent typically arrives 45 to 60 days into active marketing, and the full sale closes in 4 to 6 months on average, and in no more than 9 months across every industry we advise. For the broader picture, see the sell your business hub.
Prepare and value
Normalize earnings, reduce owner dependence, and set a defensible value.
Data room and story
Assemble financials, contracts, and the equity story for buyers.
Go to market
Approach a wide universe of qualified buyers under NDA.
IOIs and LOIs
Run buyers to competing offers, then exclusivity on your terms.
Diligence to close
Confirmatory diligence and legal drafting through to a signed deal.
Step 1: Prepare and value your business
The first step is to prepare the business and set a defensible value, because everything downstream depends on going to market ready and with a realistic number. Preparation means normalizing earnings into adjusted EBITDA, documenting add-backs, reducing owner dependence, and resolving the issues a buyer would use to negotiate the price down.
Valuation sets the expectation and the target. Most lower-middle-market businesses are valued at 4x to 8x adjusted EBITDA, set by size, growth, margins, recurring revenue, and owner dependence. Start with the valuation calculator for an indicative range, and see business valuation for the methods. The deeper preparation work is the subject of exit planning.
Step 2: Build the data room and the equity story
The second step is to assemble a complete data room and a clear equity story, so diligence runs on your timeline rather than stalling on missing information. The data room holds three to five years of financials, tax returns, contracts, customer and revenue detail, and an organizational overview. The equity story explains why the business is valuable and where its growth comes from, in the buyer's language.
A prepared data room does two things. It shortens diligence, which is where deals most often slow down or die, and it signals to buyers that the business is well run, which supports the price. The sell-side checklist covers what to assemble, and getting diligence-ready from the seller's side is the focus of vendor due diligence.
Valuation in 2 minutes
Know your number before you go to market
Get an indicative range in two minutes with the FISART valuation calculator, reviewed by a senior advisor.
Step 3: Approach the buyer universe confidentially
The third step is to approach a wide, well-matched universe of qualified buyers under NDA, because competition is what drives the price. Buyers first see an anonymized profile, sign a non-disclosure agreement before any names are shared, and are qualified for credibility and fit before your identity is revealed.
The buyer universe spans four types, and each values the same business differently: strategic acquirers, private equity firms, family offices, and search funds. This is where FISART's network of more than 250 vetted buyers and AI-powered buyer sourcing widen the pool beyond any one advisor's rolodex. For who the buyers are, see what an M&A advisor does.
Step 4: Indications of interest and letters of intent
The fourth step is to run interested buyers to indications of interest and then letters of intent, moving several in parallel so no single buyer gains leverage before exclusivity. An indication of interest is a non-binding first bid; a letter of intent is the stronger offer that, once signed, grants the buyer a period of exclusivity to complete diligence.
The letter of intent is the pivot of the whole process. Because it grants exclusivity, the price, structure, and key terms locked in before signing it matter more than almost anything negotiated afterward. Running competing bids up to this point is what gives the seller the leverage to sign a strong LOI rather than a weak one. For what an LOI contains, see letter of intent explained.
Step 5: Due diligence and close
The final step is confirmatory due diligence and legal drafting through to close, where the buyer verifies what was represented and the two sides negotiate the purchase agreement. A well-prepared data room makes this stage faster and lower-risk, because the buyer finds fewer surprises to reopen the price.
Diligence covers financial, commercial, legal, and operational review. In parallel, lawyers draft the purchase agreement, working out working-capital pegs, any earn-out or seller financing, and the reps and warranties. The deal closes when funds transfer and the agreement is signed. A senior advisor manages this stage to hold the terms agreed in the LOI and keep the deal on schedule. For the FISART methodology across all five stages, see our process.
Related reading
Frequently asked questions
Direct answers on how to sell, how long it takes, the first step, and the letter of intent.
Ready to start the process?
Book a confidential consultation with a senior advisor to map the steps for your business and the timeline you can expect. No obligation, and no junior team.