How long does it take to sell a business?

Per IBBA (International Business Brokers Association) market data, a typical third-party business sale takes 9–18 months from decision to close. This includes 2–4 months of preparation (cleaning up financials, reducing owner dependency), 2–3 months to engage a broker and prepare marketing materials, and 4–9 months of active marketing, buyer meetings, due diligence, and closing. Businesses under $1M in value can sometimes close in 6–9 months; businesses over $5M often take 12–24 months. Per SBA.gov, SBA 7(a) loan approvals alone take 60–90 days — factor this into your timeline if buyer financing is involved.

When should I start planning to sell my business?

Start exit planning 2–4 years before you want to retire. Per BizBuySell transaction analysis, owners who plan 3+ years ahead typically sell for 20–40% more than those forced to sell quickly. This gives you time to increase value (reduce owner dependency, clean up financials, grow recurring revenue) and negotiate from a position of strength rather than urgency. The IRS requires capital gains reporting per Topic 409 — give yourself time to structure the transaction tax-efficiently.

What does a business broker cost?

Per IBBA published fee guidelines, business brokers typically charge 8–12% of the sale price for businesses under $5M, with minimum fees of $15,000–$25,000. M&A advisors for larger deals ($5M+) often charge 3–6% on a Lehman fee scale. Most brokers work on success fees only — no upfront cost. For a $2M sale, expect to pay $160,000–$240,000 in broker fees. This is typically well worth it: brokered sales achieve higher prices and higher close rates than for-sale-by-owner transactions, per IBBA data.

What is owner dependency and why does it matter for selling a business?

Owner dependency is the degree to which the business requires the owner's daily involvement to operate. Per BizBuySell/DealStats transaction analysis, high owner dependency is the #1 reason businesses fail to sell or sell at deep discounts (0.3–0.5x multiple penalty). Buyers need confidence the business will continue generating revenue without you. To reduce dependency: document all processes (SOPs), build a management team, shift client relationships from yourself to staff, and establish systems for sales, operations, and finance. This process typically takes 12–18 months.

How much is my business worth?

Per IBBA and BizBuySell data, most small businesses sell for 2–4x Seller's Discretionary Earnings (SDE). Service businesses with recurring revenue and low owner dependency command 3–5x. Businesses with high owner dependency or declining revenue may sell for 1.5–2x. Per IRS guidance, your cost basis in the business determines your capital gains tax — not the sale price alone. A CPA business valuation ($2,000–$5,000) gives you a defensible number for marketing and tax planning. RetireStack's Exit Timeline Planner estimates your value based on your inputs.

Exit Timeline Planner — Business Exit Roadmap to Retirement

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📋 How We Build Business Exit Roadmaps

This tool synthesizes public data from government agencies, industry associations, and broker databases to generate personalized exit timelines. We cite primary sources so you can verify every figure.

Exit timeline benchmarks: Based on IBBA (International Business Brokers Association) annual market reports and BizBuySell transaction data — the largest SMB sale database in the U.S.
Broker fees: Verified against IBBA guidelines and published M&A fee schedules from multiple broker networks.
Capital gains rates: Per IRS Topic 409 — Capital Gains and Losses and SSA guidance on retirement income taxation.
SBA loan data: Per SBA.gov 7(a) loan program guidelines and approval timelines.
Owner dependency research: Based on DealStats / BizBuySell statistical analysis of what reduces time-on-market and sale multiples.
Content reviewed by: M&A advisors and business exit planners. Last reviewed: 2026.

How Long Does It Take to Exit a Business?

A well-prepared third-party business sale takes 9–18 months from decision to close. Owners who start 2–4 years before their target retirement date consistently achieve higher valuations and cleaner deals. The exit timeline has five distinct phases: foundation (documentation, financial cleanup), value enhancement (reduce owner dependency, formal valuation), broker engagement and marketing, due diligence and LOI, and close with transition.

Owner dependency is the single biggest factor that reduces business sale prices. Buyers pay premium multiples (3.5–5x EBITDA) for businesses that can run without the founder. Businesses where the owner IS the business — handling sales, key relationships, and daily operations — typically sell for 1.5–2.5x or fail to sell at all. Reducing dependency takes 12–18 months minimum and requires building a management team, documenting processes, and transitioning client relationships to employees.

The total transaction cost of selling a business is 12–18% of sale price, including broker fees (8–12%), transaction attorney fees ($10,000–$25,000), CPA and financial cleanup costs ($2,000–$8,000), and any required business improvements. Proceeds from the sale are subject to long-term capital gains tax (15–20% federal, plus any applicable state tax). Use RetireStack's Post-Sale Retirement Bridge to map net proceeds to monthly retirement income.

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How Long Does It Take to Exit a Business?

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How Long Does It Take to Exit a Business?

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