If you’re thinking about selling your business, you probably have a lot of questions - and not a lot of people you can ask without tipping your hand. We hear these business broker questions every week, so here are honest answers to the ones that come up most.
If your specific question isn’t here, schedule a confidential conversation and we’ll give you a straight answer.
Timeline and Process
How long does it take to sell a business?
Most sales take 6-9 months from engagement to close. Some take longer if the business is complex, the market is tight, or the seller needs more time to prepare. The fastest sale Arx has completed was 15 days - all cash, exceptional circumstances. Don’t plan around that.
The biggest variable is usually preparation. Getting your financials organized, resolving any legal loose ends, and building a solid information package can take weeks before you even go to market. That’s normal. Rushing this phase almost always costs you money on the back end. For the full breakdown, see our step-by-step process guide.
What does the process actually look like?
In broad strokes: we evaluate your business, agree on a pricing strategy, prepare marketing materials, reach out to buyers, manage the back-and-forth of offers and due diligence, and guide you through closing. The full process page walks through each phase in detail, including what you’ll need to do at each step.
When should I start planning to sell?
Ideally, 1-2 years before you want to close. That gives you time to clean up financials, reduce owner dependency, and address anything that might scare buyers off during due diligence.
That said, we talk to owners every week who don’t have that kind of runway - health issues, burnout, partnership disputes, life changes. If that’s you, starting now is better than waiting. We can work with compressed timelines. It just changes the strategy. Check out our exit planning checklist for a realistic look at preparation.
Can I sell while still running the business?
Yes, and you’ll need to. Buyers want to see a business that’s performing well during the sale process, not one that’s already coasting. We structure the process to minimize disruption to your daily operations. Most of the heavy lifting - buyer outreach, screening, negotiations - is on us, not you.
Confidentiality
How do you keep my sale confidential?
Confidentiality is the thing sellers worry about most, and for good reason. If your employees, customers, or competitors find out you’re selling before you’re ready, it can cause real damage.
Here’s how we handle it: your business is never publicly identified in marketing materials. We use a “blind profile” that describes your business without naming it. Before any buyer sees detailed information, they sign a non-disclosure agreement. And we vet buyers before sharing anything - no tire-kickers get access to your financials. Our confidentiality guide goes deeper on the specific protections.
Will my employees find out?
Not from us, and not from the process if it’s managed correctly. We don’t contact your employees, visit your business without coordination, or do anything that would tip them off. Most sellers tell their key people on their own terms, usually after a deal is under LOI or close to closing. We have a whole guide on how to tell your team when the time is right.
What about competitors seeing the listing?
We screen every buyer inquiry before sharing details. If a competitor reaches out, we flag it immediately and let you decide how to handle it. Some sellers are fine with competitor interest (competitors often pay premiums). Others want competitors excluded entirely. Your call.
Fees and Costs
How much does a business broker charge?
Fees depend on deal size. Arx uses a success-fee model based on a Lehman scale - the percentage steps down as the sale price increases. For most businesses in our market ($1M-$10M), effective fees typically land in the 8-10% range. Larger deals pay a lower percentage.
The important part: you only pay when your business sells. No upfront retainer, no monthly fees. Our fees page has the complete breakdown, including how the scale works at different price points.
Are there any upfront costs?
No. Arx operates on a success-fee-only basis for our core lower-middle-market engagements. You don’t write us a check until you get paid. That’s how it should work - it keeps our incentives aligned with yours.
What happens if my business doesn’t sell?
You don’t owe us a fee. That’s the whole point of the success-fee model. It also means we’re selective about the businesses we take on - we turn down roughly 85% of inquiries. If we don’t believe we can get your business sold at a price that makes sense for you, we’ll tell you that upfront rather than waste your time. If you want to understand why some business sales fail, that article is worth reading.
Is the commission negotiable?
Sometimes. If there’s a special situation - maybe the fee structure is genuinely the thing preventing you from moving forward on a sale that otherwise makes sense - it’s worth a conversation. But “negotiable” doesn’t mean “discount by default.” Our fees reflect the work involved in actively finding and vetting buyers, not just posting a listing and hoping someone calls.
What if I already have a buyer in mind?
If you bring a buyer to the table, we discount our commission. We still run the full process - due diligence management, negotiation, legal coordination, closing support - because those steps protect you whether the buyer came from our outreach or your Rolodex.
Finding and Screening Buyers
How do you find buyers?
We don’t wait for buyers to find you. We actively reach out to 250+ targeted buyers per deal - strategic acquirers, private equity groups, independent operators, and industry-specific buyers who’ve expressed interest in businesses like yours. That’s on top of listing exposure through broker networks and industry channels. The find buyers page explains the full sourcing approach.
This is one of the biggest differences between Arx and legacy brokers. Most firms in this market post your listing on a couple of websites and wait. We pick up the phone.
How do you screen buyers?
Before a buyer sees anything meaningful about your business, they need to demonstrate they’re serious and capable. That means proof of funds or financing capacity and a signed NDA. We verify both before sharing your confidential information memorandum.
After that, the screening continues throughout the process. Not every interested buyer is a qualified buyer, and it’s our job to figure out who’s real and who’s wasting your time.
Do I have to meet with every interested buyer?
No. We handle initial conversations, filter out the unqualified, and bring you the buyers worth your time. You’ll typically meet with a handful of serious candidates, not dozens of looky-loos.
What if a buyer can’t get financing?
It happens. Due diligence and financing fall through for all kinds of reasons. That’s why competitive interest matters - if you have multiple qualified buyers, one deal falling apart doesn’t send you back to square one. It’s also why our engagement agreement specifies that no fee is owed if a buyer fails financing through no fault of yours.
Tax Implications
What are the tax implications of selling my business?
They’re significant, and they depend heavily on your specific situation - entity structure, asset vs. stock sale, how long you’ve owned the business, state taxes, and a dozen other variables. We can give you a general framework and make sure deal structure accounts for tax efficiency, but this is an area where you need your own tax advisor involved early.
For a general overview, our tax implications guide covers the big concepts.
Should I talk to my accountant before listing?
Yes. Ideally before you even call us. Your CPA or tax advisor can help you understand the tax consequences of different deal structures, identify any cleanup that should happen before the sale, and plan for the after-sale tax hit. The earlier they’re involved, the more options you have. And if your accountant doesn’t have M&A experience, it’s worth getting a referral to one who does.
Asset sale or stock sale - which is better?
It depends on who you ask. Buyers usually prefer asset sales (they get a stepped-up basis for depreciation). Sellers usually prefer stock sales (more favorable capital gains treatment in many cases). Most deals in the lower middle market end up as asset sales, but the purchase price and deal terms often adjust to account for the tax difference. Your advisor and your attorney should both weigh in on this one. Our deal structure guide explains the tradeoffs.
When You Might Not Need a Broker
We’re not going to pretend every seller needs us. Here are situations where hiring a broker might not make sense:
You’re selling to a family member or business partner. If the buyer is someone you already know and trust, and you can agree on a fair price, the main thing you need is a good attorney and a solid purchase agreement. A business valuation is still worth getting so both sides feel good about the number, but you probably don’t need a full buyer-search process. Our valuation guide can help you understand what that looks like.
Your business is very small. Below roughly $500K in annual revenue, broker fees may not make economic sense relative to the sale price. At that size, a direct sale through your network or a marketplace listing with legal counsel might be the better path. We wrote a whole guide on selling without a broker for exactly this situation.
You already have a committed buyer. If someone has made a credible offer and you just need help negotiating and closing, some brokers (including Arx) offer reduced-scope engagements. But make sure you understand what “credible” means before you skip the market test - a verbal expression of interest isn’t an LOI with financing behind it.
It’s a partnership buyout with an existing agreement. If your operating agreement already spells out the buyout terms, you may just need a valuation and legal review. A broker adds the most value when you’re going to market - not when the buyer and the terms are already defined.
Valuation and Worth
What is my business actually worth?
That’s the first question every seller asks, and the honest answer is: it depends. Your business is worth what a qualified buyer will pay for it, which is driven by your adjusted cash flow, industry multiples, growth trajectory, customer concentration, and how dependent the business is on you personally.
We can give you a realistic range based on your financials and comparable transactions in your market. It’s not a guess - it’s grounded in what businesses like yours have actually sold for. If you want to start there, our free evaluation gives you a confidential, no-obligation assessment.
What factors make my business worth more or less?
The biggest value drivers are consistent cash flow, a diversified customer base, a management team that can operate without you, and documented systems. Recurring revenue helps a lot. So does being in an industry where buyers are actively looking.
On the other side, owner dependency is the most common value killer. If the business can’t run without you for two weeks, buyers see risk - and they’ll price that in. Customer concentration is the other big one. If one client represents 30%+ of revenue, that’s a red flag. Our valuation guide breaks down all the factors in detail.
What if I’ve been minimizing profits for tax purposes?
You’re not alone. A lot of owners run personal expenses through the business or structure things to minimize taxable income. That’s fine for tax purposes, but it makes your business look less profitable on paper than it actually is.
This is where “add-backs” come in. We work with you to recast your financials and show buyers the true earning power of the business - things like above-market owner compensation, one-time expenses, personal vehicles, family members on payroll. Buyers and their lenders understand this process. It’s standard in lower middle market deals, and getting it right can meaningfully change your valuation.
After the Sale
What happens to my employees when the business is sold?
In most acquisitions, the buyer wants to keep your team. They’re buying a functioning business, not a shell - your people are a big part of what makes it valuable. That said, there are no guarantees, and buyers may eventually make changes to management or structure.
We encourage sellers to negotiate employee protections into the purchase agreement when it matters to them. Things like guaranteed employment periods for key staff or maintaining existing benefit levels for a transition window. It’s not always possible, but it’s worth asking for.
Will the buyer expect me to stay on after closing?
Usually, yes - at least for a while. Most buyers want a transition period where you help introduce them to key customers, vendors, and employees. That’s typically 3-6 months, sometimes longer for complex businesses or industries with deep relationship dependencies.
The terms of your involvement get negotiated as part of the deal. Some sellers stay on as consultants for a few hours a week. Others do a full-time handoff for 90 days. And some negotiate a clean break at closing, though that’s less common and usually means a lower price. The key is making sure expectations are clear before you sign, not after.
What are earnouts and should I accept one?
An earnout is a portion of the purchase price that’s paid over time, contingent on the business hitting certain performance targets after closing. Buyers like them because they reduce risk. Sellers are often less enthusiastic, for good reason - you’re betting on results you no longer fully control.
That said, earnouts aren’t always bad. If a buyer is offering a strong base price and the earnout is upside on top of that, it can work in your favor. The danger is when a large chunk of the purchase price is tied to earnout milestones. We negotiate earnout terms carefully - clear metrics, reasonable targets, protections against the buyer tanking performance to avoid paying. Your attorney should review these provisions closely too.
What am I liable for after the sale closes?
Potentially more than you’d think. Most purchase agreements include representations, warranties, and indemnification clauses that can create liability for a period after closing - typically 12-18 months, sometimes longer for certain issues like tax or environmental matters.
This means if a buyer discovers something you represented as true turns out not to be - undisclosed liabilities, overstated financials, pending litigation you didn’t mention - they can come back for money. That’s why accuracy during due diligence matters so much. It’s also why many deals include an escrow holdback (a portion of the proceeds held in reserve for a set period). We help you understand these provisions and negotiate reasonable limits on your exposure.
The Uncomfortable Questions
Is my business actually sellable, or is it really just a job I created for myself?
This is the question people think but rarely ask out loud. And it’s a fair one. If the business can’t operate without you - if you are the sales team, the service delivery, and the relationship holder - then what a buyer is really purchasing is a job, not a company. That’s a harder sell, and it’s worth less.
The good news is that owner dependency is fixable if you have runway. Hiring a manager, documenting your processes, diversifying your customer relationships - these things take time, but they’re exactly what turns a job into a sellable business. We’re honest with owners about where they stand on this spectrum. Sometimes the answer is “not yet, but here’s what to work on.” That’s a better outcome than listing a business that won’t sell.
Why do business brokers have such bad reputations?
Because a lot of them have earned it. The barrier to entry in this industry is low. Many brokers have never built or sold a business themselves, communication is often terrible, and the “post and pray” approach to finding buyers means a lot of listings just sit there.
We started Arx because when Brecht went to sell his own software business, the broker options were underwhelming. That’s why we represent sellers exclusively and actively pursue buyers instead of waiting for them. We’re not going to pretend the industry doesn’t have problems - we’d rather show you how we’re different.
What’s a realistic success rate for selling a business?
Industry-wide, the numbers aren’t great. Depending on whose data you look at, somewhere between 20-30% of listed businesses actually close. The reasons vary - overpriced listings, unprepared sellers, brokers who took on businesses they shouldn’t have.
That’s one reason we’re selective about the businesses we take on. Turning down ~85% of inquiries isn’t arrogance - it’s honesty about which businesses we can actually help. If we don’t think we can get it sold at a price that works for you, we’d rather tell you that upfront.
What should I know about exclusivity agreements and tail clauses?
Most broker agreements include an exclusivity period (typically 6-12 months) and a “tail” clause that covers buyers introduced during the engagement. Both are standard and reasonable - they protect the broker’s investment of time and money in marketing your business.
What to watch for: exclusivity periods longer than 12 months, tail clauses that extend years after the engagement ends, or agreements that don’t let you terminate for non-performance. Read the agreement carefully, and ask questions about anything that feels off. A good broker will explain every clause without getting defensive.
How do I know if a broker is inflating my valuation to win my listing?
This is called “buying the listing” and it’s one of the oldest tricks in the industry. A broker quotes you a number 20-30% above what your business will actually sell for, you sign the engagement, and then a few months later they start pushing you to lower the price.
Red flags: a valuation that’s dramatically higher than other estimates you’ve gotten, no clear methodology behind the number, or pressure to sign quickly before you “miss the window.” A credible valuation is based on your financials, comparable transactions, and market conditions - and the broker should be able to walk you through exactly how they got there. Our evaluation process is designed to give you an honest number, even if it’s not the one you were hoping for.
Your situation is specific, and a FAQ page can only go so far. If you want straight answers about your business - what it might be worth, what the timeline looks like, what your options actually are - the best next step is a conversation.
Continue exploring: How we work with sellers · Our process · Our fees · How we find buyers
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