How to Sell Your Business in 2026: Valuation, Brokers, Taxes & Timeline

Disclosure: Our content isn't financial advice. Do your due diligence and speak to your financial advisor before making any investment decision. We may earn money from products reviewed. (Learn more)

I have been writing about investing and business ownership for more than two decades, and if there is one conversation that comes up more than any other with readers in their 50s and 60s, it is this one: how do I actually sell this thing I built? The first time I walked a friend through a sale, back in the mid-2000s, he priced his distribution business on gut feel, told his golf buddies it was for sale, and watched the deal die twice in due diligence. It eventually sold, for about 30 percent less than his first offer. Almost every mistake he made is still the most common mistake today. This guide is everything I wish he had known, updated with 2026 market data.

The 2026 market at a glance

Transaction volume cooled about 10 percent year over year in early 2026, but pricing has held firm. Buyers are still paying full multiples for clean, well-documented businesses. The sellers struggling right now are the ones with messy books and owner-dependent operations, and the gap between those two groups is the widest I have seen in years.

Step 1: Know what your business is actually worth

Small businesses are priced on a multiple of seller’s discretionary earnings, or SDE. That is your profit plus your salary, benefits, and any personal expenses run through the business. Larger companies, roughly $2 million and up in price, trade on EBITDA multiples instead. Here is what closed deals have actually been fetching:

Two numbers matter more than anything else: your last twelve months of provable earnings, and the trend line. Buyers pay for the future but underwrite the past. If you cannot document an add-back with a bank statement or tax return, in the buyer’s mind it does not exist.

Want a fast starting point before reading on? My free business valuation calculator applies these same closed-deal multiples to your numbers in about a minute, with no email required.

Step 2: Decide who sells it, you or a broker

You can sell yourself on a marketplace, and for small online businesses that is often reasonable. I break down the main options in my ranking of the best business brokers, and I have separately reviewed the big online marketplaces like Empire Flippers for internet-based businesses. For a traditional main street or lower middle market company, a good broker earns their fee through pricing discipline, confidentiality, and buyer screening. Expect to pay roughly 10 percent on smaller deals. Larger deals typically use the Double Lehman scale: 10 to 12 percent on the first million, 8 percent on the second, 6 percent on the third, and so on down. A $5 million sale runs somewhere around $300,000 in fees. Nearly all reputable main street brokers work on pure success fees, so be wary of anyone charging large upfront “marketing” retainers at this size.

Step 3: Package it and market it confidentially

The selling document is called a CIM, a confidential information memorandum. Buyers first see a blind teaser with no company name, sign an NDA, then get the full package. Confidentiality is not paranoia. I have watched a deal where a competitor posed as a buyer, learned the customer list, and poached the top account mid-negotiation. Your employees, customers, and vendors should learn about the sale on your timeline, not the rumor mill’s.

Step 4: Offers, due diligence, and the finish line

Serious buyers submit a letter of intent with a 30 to 90 day exclusivity window, then due diligence begins. Have three years of financial statements and tax returns, your add-back schedule, lease agreements, customer concentration data, employee roster, licenses, and any litigation or liens documented before you list, not after. Deals do not usually die from bad news. They die from surprises. The buyer who finds an undisclosed problem in week eight assumes there are ten more you hid.

How long does it take?

From listing to closed check, the median is about 170 days. Add preparation time and you should think of selling as a 10 to 12 month project. Bigger deals take longer: businesses in the $1 to $5 million range average around 290 days on the market. This is exactly why I tell readers to start the process while the business is still growing. Buyers pay premiums for upward trend lines and discount heavily for burnout. I wrote about choosing the right moment in my guide to exit strategy timing.

Seller financing and the 2025 SBA rule change

Most buyers of businesses under $5 million use SBA 7(a) loans, which currently run about 9.75 to 10.5 percent and require the buyer to inject at least 10 percent equity. A 2025 rule change reshaped seller notes: a seller note can now cover at most half of that 10 percent injection, and if it does, it must sit on full standby, meaning zero payments to you for the life of the SBA loan. Partly as a result, only about 23 percent of sellers now plan to offer financing, while over 60 percent of buyers still want it. If you do carry a note, typical terms run 10 to 30 percent of the price at 6 to 7 percent interest over three to five years. Recent IBBA data shows sellers averaging 76 to 89 percent cash at close, which is healthier than the folklore suggests.

Taxes: the part everyone plans too late

Buyers almost always want an asset sale, because they get a stepped-up basis and fresh depreciation. Sellers generally prefer a stock sale, because everything is long-term capital gain. In an asset sale, the price gets allocated across asset classes on IRS Form 8594, and portions like inventory and depreciation recapture are taxed as ordinary income at up to 37 percent, while goodwill gets capital gains treatment. For 2026, long-term capital gains run 0, 15, or 20 percent, with the 20 percent bracket starting above roughly $545,000 of income for single filers, plus the 3.8 percent net investment income tax at higher incomes. If you carry a seller note, installment sale treatment lets you spread the gain across the years you collect. And if you own C-corp stock, ask your CPA about Section 1202: stock acquired after July 4, 2025 now carries a $15 million exclusion cap with partial exclusions starting at a three year hold. Get this planning done before you sign a letter of intent, because after the LOI your leverage to restructure is gone. This is also the moment to think about what happens to the proceeds; I cover that side in my Fisher Investments review and other wealth management coverage.

The five mistakes that kill sales

After twenty years of watching deals succeed and fail, the pattern is boringly consistent. First, overpricing on emotion; the market pays 94 percent of a realistic ask and simply ignores a fantasy one. Second, messy books, with personal expenses tangled through the P&L that cannot be documented. Third, owner dependence; if the business cannot run for two weeks without you, you are selling a job, not a company. Fourth, waiting until decline or burnout to list. Fifth, neglecting the business during the six to twelve month sale process, which invites the buyer to re-trade the price at due diligence. Fix the first three a year before listing and you will be ahead of most sellers in the country. It also pays to keep your risk house in order while you operate: buyers look closely at coverage, and I keep a current ranking of the best business insurance companies for exactly that reason.

Selling a business: frequently asked questions

Market data cited from the BizBuySell Insight Report and the IBBA and M&A Source Market Pulse survey.