The Hidden Gap in Small-Business Exits: Why Most Business Owners Fail to Sell Their Business
Most small business owners worry about ‘timing’ the market. They should worry instead about preparation.
By
Dec 3, 2025
NATIONWIDE - DECEMBER 2025 - (USAnews.com) Every year, millions of American small-business owners reach a crossroads: retire, step back, or sell. Yet despite this often being the largest financial transaction of their lives, most owners approach the process unprepared.
Many fixate on “market timing”—the economy, interest rates, or the stock market. But the data tells a different story. Industry figures from more than 10,000 Main Street transactions show valuation multiples holding remarkably steady at 2.5–3x Seller’s Discretionary Earnings (SDE) for more than a decade, across recessions, rate hikes, and COVID-era volatility.
Market timing rarely moves the needle. Preparation always does.
And that’s where most owners fall short.
This readiness gap—between what owners think matters and what actually drives outcomes—is what Edouard Lyndt, founder of Sundance Financial, is working to close.
A Founder Who Has Seen the Stakes Up Close
Lyndt grew up in a family that ran small businesses—a restaurant and a nail salon built through long hours, thin margins, and personal sacrifice. Later, after building a career at leading investment banks, private equity firms, and management consulting companies, he saw the same recurring issue across Main Street: owners running strong, resilient businesses, but entering the sale process blind and underprepared.
When those owners finally decided to sell, they typically turned to business brokers—intermediaries who specialize in marketing and selling small businesses, much like real estate agents do for homes. But Lyndt noticed a troubling pattern: the brokerage model wasn't built to serve owners' best interests.
"Small-business owners rarely have corporate deal teams or sophisticated advisors," Lyndt says. "They have tax returns, messy books, and twenty years of sweat equity. They deserve better support than what the traditional brokerage industry provides."
The Industry Problem Few Talk About
Main Street business brokerage is fragmented and—depending on the state—effectively unregulated. Barriers to entry are low, so the industry is filled with underqualified brokers who often lack formal training in finance, valuation, or dealmaking. Despite this, commissions commonly run over 10%, making it one of the most expensive advisory services a small-business owner will ever hire.
Most brokers in this space take a scatter-gun approach: list as many businesses as possible, blast them to a buyer list, and hope a few deals stick. That model rewards volume, not preparation or quality.
The consequences for owners are predictable:
Minimal transparency in how their business is valued
Inconsistent or inadequate preparation, which reduces value
Misaligned incentives, with brokers prioritize closing quickly over maximizing outcomes
Little meaningful owner education, leaving sellers unsure, anxious, and reactive
This environment leaves owners vulnerable—and unprepared for the scrutiny buyers will apply.
Why Owners Undervalue Preparation
Most owners only begin preparing once they’re emotionally ready to sell. By then, it’s too late to fix the issues that meaningfully affect value.
Common problems that depress valuations include:
unclean financials
undocumented processes
owner-dependence
outdated or non-assignable contracts
customer concentration
These issues can’t be repaired in the final weeks of a transaction.
It’s no surprise, then, that an estimated 85% of small businesses never sell. Most fail to meet the three basic requirements of a sellable business:
Survivability: The business must function without the owner’s daily involvement.
Transferability: Value must be tied to systems, assets, and contracts that a buyer can assume.
Profitability: Buyers must have confidence they can earn a fair return on their investment.
Owners who don't plan ahead rarely have a business that satisfies all three.
What Owners Should Do Now—Not Later
Lyndt recommends that owners begin preparing 6–24 months before they plan to sell. The most important steps are straightforward but often neglected:
1. Establish financial readiness
Get your books in order. Buyers will scrutinize your financials before anything else. Clean, accurate, and well-organized statements signal credibility from day one and prevent surprises during due diligence.
2. Document operations
Buyers pay a premium for transferability. Create written processes, training materials, and organizational charts. Businesses that run on institutional knowledge rather than documented systems appear riskier and command lower multiples—even if they're highly profitable.
3. Prepare for handover
Reduce owner-dependence by hiring or promoting management, cross-training employees, and ensuring key contracts are assignable. The goal is to prove the business can thrive without you at the center of every decision. This single factor often determines whether a deal closes or falls apart during due diligence.
Owners who complete these steps consistently achieve higher valuations, encounter fewer surprises, and experience smoother closings.
Next Steps for Business Owners
Starting early is often the single most important lever in a successful sale. Owners who prepare—rather than react—control the narrative, set realistic expectations, and enter the market with confidence.
Sundance Financial partners with Main Street owners to modernize the exit process through data-driven valuations, structured preparation workflows, and hands-on advisory support.
To learn more, visit Sundance Financial or connect with Edouard Lyndt on LinkedIn.
