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Buying and Selling Businesses: A Practical 2026 Resource

Quick Answer

Business buying and selling involves four primary paths: traditional broker auctions (9-18 months, 6-12% seller fees), direct buyer-to-seller negotiations (60-120 days, no fees), buyer-paid advisory (60-120 days, seller pays $0), and investment bank auctions for deals over $25M EBITDA. Most owner-operated businesses in the lower-middle market are valued at 4-8x EBITDA depending on sector, with buyer-paid models offering sellers faster timelines and zero upfront costs compared to traditional broker-driven auctions.

Buying and selling businesses, both sides of the same coin. Whether you’re a founder considering a sale or a buyer looking for off-market opportunities, the underlying mechanics share the same building blocks: defensible valuation, clean deal structure, tight diligence process, and the right team. This page is a practical resource that covers both sides.

We’re CT Acquisitions, a buy-side M&A advisory firm. We work with 100+ active capital partners (PE, family offices, search funders, strategic acquirers) acquiring founder-owned businesses. The buyer pays our fee at closing; sellers pay nothing. For a comprehensive guide, see our complete buy-sell guide.

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What this guide covers

Both sides need: defensible valuation, clean structure, tight diligence, right advisors
For sellers: typical multiples 4-8x EBITDA depending on sector. Use our free valuation tool
For buyers: off-market sourcing yields better pricing than auction processes
Timeline: 60-120 days for sequential transactions; 9-18 months for broker auctions
Cost: traditional brokers charge sellers 6-12%; buyer-paid models charge sellers $0
Want the deep dive? See our comprehensive guide

The four paths for buying or selling a business

Most owner-operated business transactions take one of four paths, each with very different fee structures, timelines, and outcomes:

Path 1: Traditional broker auction

Seller hires broker, signs exclusivity, pays retainer. Broker markets to a wide pool. Seller pays 6-12% success fee at close. Total time: 9-18 months. Best for: when buyer pool is large and seller wants to maximize bidder competition.

Path 2: Direct buyer-to-seller

Both parties negotiate without intermediaries (or with just transactional attorneys). No advisor fees. Total time: 60-120 days. Best for: when both sides already know each other.

Path 3: Buyer-paid sell-side advisory

Sell-side advisor with buyer network introduces seller to pre-qualified capital partners. Buyer pays advisor fee; seller pays $0. Sequential, confidential. Total time: 60-120 days. Best for: most lower-middle-market sellers ($1M-$25M EBITDA). See our full breakdown.

Path 4: Investment bank auction

For deals over $25M EBITDA. Investment bank runs structured auction. Fees 1-3% of deal plus retainer. Best for: large deals attracting strategic and PE bidders.

Valuation: how it actually works

Most owner-operated businesses are valued on EBITDA multiple. Sector ranges:

Home services: 4.0x-7.5x EBITDA
B2B services: 4.5x-8.5x
Healthcare services: 5.5x-10.0x
Light manufacturing: 4.0x-7.5x
Logistics: 4.5x-8.0x

The actual multiple depends on size, recurring revenue percentage, owner dependency, growth, and customer concentration. Use our valuation tool for a sector-adjusted range. For deeper detail, read our valuation resources hub.

Buyer types and what they pay

Buyer Pool	Best Fit Size	Typical Multiple
Search funders	$500K-$3M EBITDA	Lower end
Family offices	$1M-$15M EBITDA	Mid-to-upper
Lower-middle PE	$2M-$25M EBITDA	Upper end
Strategic acquirers	Any size	Highest (synergy premium)

The deal structure considerations

Asset vs. stock sale: 5-10% net proceeds difference
Earn-outs: 10-30% of price contingent on post-close performance
Rollover equity: 10-30% taken as continued ownership in buyer’s company
Escrow / indemnification: 5-15% held back 12-24 months
Working capital target: often creates 6-figure post-close adjustments

For comprehensive treatment of these and more, read our complete buy-sell guide.

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Six questions, sector-adjusted EBITDA multiple range, plus the specific factors driving your number up or down. Same framework institutional buyers use.

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The five pillars of how CT Acquisitions works

$0 to Sellers

Buyer pays our fee. Founders never write a check.

No Retainer

No engagement letter. No upfront cost. No exclusivity contract.

100+ Capital Partners

Search funders, family offices, lower-middle-market PE, strategics.

Sequential, Not Auction

Confidential introductions to the right buyers. No bidding war.

60-120 Day Close

Not 9-12 months. Not 18 months. Months, not years.

No Pitch · No Pressure

Buying or selling? Start a confidential conversation.

Whether you’re a founder considering a sale or a buyer looking for off-market opportunities, we’ll have a real conversation about your situation. No pitch, no obligation.

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How financing works for business buyers

The financing structure on the buy side determines how much you can pay and which businesses you can target:

SBA 7(a) loans (sub-$5M deals)

The SBA guarantees up to 75% of the loan. Loans go up to $5M, require 10% buyer equity (sometimes 5% with a seller note), have 10-25 year terms, rates typically 1.5-3% above prime, and take 60-120 days from application to funding. Best for owner-operator buyers running the business themselves.

Senior bank debt

For buyers with stronger balance sheets. Typically 3-5x EBITDA in senior debt for service businesses, 2-4x for manufacturing, at currently 7-10% for floating-rate facilities.

Seller financing

The seller finances 10-30% of the price as a note paid over 3-7 years. Common in SBA-backed deals and deals needing a financing bridge. Typically 1-3% below market commercial rates, subordinated to bank debt.

Equity (PE / family office / search funder)

For larger deals, buyers bring 30-60% equity from PE funds, family offices, or independent sponsors. PE-backed buyers don’t face the financing-contingency closing risk that SBA buyers do.

Tax considerations both sides should understand

Tax treatment can move a seller’s net proceeds by 10-25% depending on structure:

Asset vs. stock sale: asset sales typically cost sellers 5-10% of proceeds in taxes vs. stock sales
QSBS exclusion: C-corps held 5+ years can exclude up to $10M of gain from federal tax under Section 1202, dramatically underused
Installment sale treatment: seller-financed portions can be taxed pro rata as principal is received
State tax planning: some sellers relocate to no-income-tax states before closing (requires 6-12 months residence)
Earn-out tax timing: earn-out payments are typically ordinary income unless structured as additional purchase price

For comprehensive coverage of valuation, deal structure, diligence, and the full process, see our complete buy-sell guide.

The diligence process: what buyers actually examine

Due diligence is where most deals die. The buyer typically requests 200-1,500 documents over 30-90 days. Categories include: financial (3-5 years P&L, balance sheets, tax returns, AR aging, customer concentration, EBITDA add-back schedule), customer (top customer revenue history, contracts, churn analysis), operational (org chart, key employee retention agreements, vendor contracts, leases), legal (entity docs, ownership history, prior litigation, regulatory compliance), tax (sales tax compliance, payroll tax, prior audits, state nexus), and HR (employee classifications, benefits, workers comp, harassment/discrimination claims). Most diligence findings result in a re-trade, the buyer comes back with a lower price citing what they found. 40-60% of deals see a re-trade between LOI and close, with average price erosion of 5-15%.

Frequently asked questions

What’s the best resource for buying and selling a business?

For comprehensive guidance, our complete buy-sell guide covers valuation, deal structure, diligence, financing, taxes, and the full process from first conversation to closing. For sector-specific guidance, see our sell-your-business pillar and vertical hubs.

Do I need an advisor to buy or sell a business?

Depends on size and complexity. For sub-$500K deals, often handled directly with attorneys. For $500K-$25M, an M&A advisor adds significant value (especially buyer-paid models that don’t cost the seller). For $25M+, investment banks are typical.

What’s the typical multiple for a small business?

Most small business EBITDA multiples land 3-6x, with sector matters significantly. Healthcare and recurring-revenue clear higher; restaurants and retail clear lower. Get a sector-adjusted estimate from our valuation tool.

How do I find off-market businesses to buy?

Off-market sourcing typically through buy-side advisors (firms with direct founder relationships), industry conferences, direct outreach, and existing networks. Off-market deals are usually relationship-based rather than auction-based.

What’s the typical timeline for a business sale?

Off-market sequential: 60-120 days. Broker auction: 9-18 months. Direct buyer-seller: 30-90 days when both sides already know each other.

How much does it cost to sell a business?

Sellers using traditional brokers pay 6-12% of sale price. Sellers using buyer-paid models pay $0 (buyer pays advisor fee at closing). Plus legal and CPA fees of 1-2% in either model.