Selling process · Main Street M&A
The 10-step
Main Street sales process.
Reviewed by Rob Ismoilov · M&A AdvisorFrom engagement-letter signing to closing. LMM (>$5M revenue) deals typically run 12–18 months.
Owner decision, books cleanup, valuation, and broker selection. Nothing goes to market until this is done.
LOI through close. Exclusive period typically runs 60–90 days from LOI signature.
The 10 steps
What happens, in order, from decision to close.
Steps below assume a competitively-marketed sale with a broker engagement. Off-market direct sales (to a known strategic or a management-buyout) compress steps 5–8 but still require the same diligence and purchase-agreement work in steps 9 and 10.
- 01Week 0Owner
Decide to sell + set the exit window
The exit decision commits the owner to a 9–12 month transaction and a 2–3 year post-sale life change. Setting the window (target close quarter) up front lets everything downstream — valuation, tax planning, buyer outreach — work backward from a real date.
Deliverables
- Written target close quarter
- Financial-independence number (what net proceeds you need)
- Post-sale role decision (clean exit, consulting, or rollover)
- 02Weeks 1–4Owner + bookkeeper / CPA
Clean up financials + document add-backs
Three years of accrual-basis financials with clear owner add-backs (owner salary, personal expenses run through the business, one-time items). Cash-basis or unreconciled books cost real multiple points in diligence and are the #1 reason Main Street deals die.
Deliverables
- 3-year P&L + balance sheet (accrual basis)
- Add-back schedule with supporting documentation
- 12-month trailing SDE / EBITDA calculation
- 03Weeks 2–4Broker or independent valuator
Get a professional valuation
A defensible valuation range grounded in industry multiples, comparable transactions, and quality adjustments. The valuation sets the asking-price ceiling and — more importantly — the negotiation floor. Underpricing costs more than overpricing.
Deliverables
- Valuation range (P25 / P50 / P75)
- Comparable-transaction analysis
- Multiple-driver diagnostic (what would move the range up)
- 04Weeks 3–6Owner + prospective brokers
Select and engage a business broker
Interview 3–5 brokers. Pick one who has closed deals in your industry and state, holds current credentials (CBI, M&AMI, or similar), and matches your deal-size band. Sign the engagement letter — usually a 12-month exclusive with a success-fee schedule.
Deliverables
- Signed listing / engagement agreement
- Success-fee schedule + minimum-fee terms
- Confidentiality expectations + go-to-market plan
- 05Weeks 5–8Broker + owner
Prepare the Confidential Information Memorandum (CIM)
The CIM is the sales document — 20–40 pages that tell your business's story to qualified buyers. It's the single most important artifact in the process. A weak CIM produces low-quality inbound; a strong one filters for buyers who actually understand what they're bidding on.
Deliverables
- Confidential Information Memorandum (CIM)
- One-page teaser (blind — no identifying details)
- Financial exhibits + management biographies
- 06Weeks 7–14Broker
Confidential marketing + buyer outreach
The teaser goes out through the broker's active buyer channels — direct-mail to strategic acquirers, distribution through PE-platform lists, listing on curated marketplaces. Interested buyers sign a Non-Disclosure Agreement (NDA) before receiving the full CIM.
Deliverables
- Non-Disclosure Agreements (NDAs) from qualified buyers
- Buyer-inquiry log with source attribution
- Initial screening calls with each qualified prospect
- 07Weeks 12–18Owner + broker + shortlisted buyers
Buyer meetings + management presentations
Serious buyers get a management presentation — either video conference or on-site (evenings/weekends to protect confidentiality). The goal is mutual fit and enough transparency to price. Never disclose customer names, employee names, or pricing at this stage.
Deliverables
- Management presentation deck
- Site visit (evenings / off-hours only)
- Buyer Q&A logs
- 08Weeks 16–20Broker + attorney + buyer
Solicit and negotiate the Letter of Intent (LOI)
Qualified buyers submit LOIs — a non-binding term sheet outlining price, structure, financing, exclusivity, and timeline. The broker levers competing LOIs to negotiate the strongest package. Once signed, the LOI usually includes 60–90 days of exclusivity to close.
Deliverables
- Signed Letter of Intent (LOI)
- Exclusivity period defined
- Diligence access framework + timeline agreed
- 09Weeks 20–32Buyer + owner + accountants + attorneys
Buyer due diligence + Quality of Earnings
The buyer's team examines everything — financials (Quality of Earnings review), tax returns, customer contracts, employee agreements, leases, insurance, litigation, IP, and environmental. Simultaneously, the definitive purchase agreement (APA or SPA) is drafted and negotiated.
Deliverables
- Data room populated with diligence materials
- Quality of Earnings report
- Definitive Purchase Agreement (APA / SPA)
- 10Weeks 30–36All parties
Close + fund + transition
Final signatures, wire of the purchase price, transfer of assets and shares, and — where the deal calls for it — the seller's transition period begins. SBA-financed deals settle at the closing table via an SBA-approved lender; PE-platform deals settle through escrow with a working-capital true-up 60–90 days post-close.
Deliverables
- Executed closing binder (100+ documents)
- Purchase-price wire + escrow funding
- Transition consulting agreement (if applicable)
- Working-capital true-up 60–90 days post-close
Team
Who's actually on your side.
A Main Street sale is a team sport. Below is the minimum cast — every well-run transaction has all four roles filled before the deal goes to market.
Business broker / M&A advisor
Runs the process end-to-end. Prepares the CIM, runs buyer outreach, negotiates LOIs, quarterbacks diligence, and takes the deal to close. Typically compensated on a Modified Lehman success-fee schedule.
Transaction attorney
Drafts and negotiates the definitive purchase agreement. Reviews the LOI, disclosure schedules, employment agreements, and non-competes. Fixed-fee engagements are increasingly common in the $10K–$40K range for sub-$5M-revenue deals.
CPA / tax advisor
Runs the after-tax proceeds analysis and structures the deal for maximum after-tax cash. Advises on asset-sale vs. stock-sale allocation, F reorganizations, installment sales, and QSBS eligibility.
Wealth manager
Runs the pre-sale financial-independence analysis so you know what net-of-tax number covers your post-sale life. Reengages after close to invest the proceeds — the biggest single financial event of most owners' lives.
Deal killers
Where most Main Street deals die.
Roughly 30% of signed LOIs never reach close. IBBA practitioner data consistently identifies the same handful of causes. Every one is preventable if it's diagnosed before the deal gets to LOI.
Quality of Earnings adjustments
The buyer's QoE surfaces add-backs that the seller can't document, or normalizations that the buyer's team rejects. Result: renegotiation or walk. Fixed by having the add-back schedule, contracts, and revenue-recognition memos ready before diligence starts.
Customer concentration surprises
Concentration disclosed at CIM stage as '18% top customer' turns out to be 32% under the buyer's cut. Fixed by running the concentration analysis at multiple cuts (annual, trailing-12, by customer contact) before going to market.
Landlord or franchisor consent
Real-estate leases with assignment restrictions, or franchisor consent rights, can require months of pre-work. Fixed by identifying every consent right in step 2 and engaging with the counterparties before LOI signature.
Buyer financing failure
SBA-financed buyers whose lender changes underwriting mid-diligence. Non-SBA buyers whose equity commitment falls through. Fixed by requiring proof of financing at LOI stage and preferring buyers with independent verifiable capital.
Seller cold feet
Owner realizes at week 22 that they don't want to hand over the business. Not uncommon and often legitimate. Fixed by doing the emotional-readiness work in steps 1 and 4, well before the LOI.
Start with step 4
Get matched to a business broker for your slice.
Steps 1–3 are self-service and free on this site. Step 4 is where the broker match matters — pick a broker who's actually closed deals in your industry, state, and deal-size band.