A Low to Mid-Market Owner's Guide To The Selling Process
Selling a business is one of the most significant financial decisions a business owner will ever make. For owners of companies generating between ~$1 million and ~$25 million in annual revenue, the process is far more complex than simply listing a business for sale and waiting for offers.
This overview guide is designed to get you familiar with more of the details and walks through how low to mid-market businesses are sold, what buyers expect, and how owners can maximize value while protecting confidentiality.
Step 1: Understand What Your Business Is Really Worth
Low to Mid-Market buyers value businesses primarily on an adjusted formula based on EBITDA and/or SDE, not revenue. Most lower to middle-market companies will trade within an EBITDA or SDE multiple range of 2.5x–6.5x, depending on:
- Quality of earnings
- Customer concentration
- Management depth/Plug & play capabilities
- Industry stability
- Growth potential
A professional valuation sets realistic expectations and prevents deals from falling apart later.
Step 2: Prepare the Business for Sale
Preparation should often start 6–24 months before even going to market. Key areas buyers scrutinize include:
- Clean financial statements & historical access
- Normalized owner compensation and other expenses
- Documented processes
- Transferable customer relationships
- Second-tier management infrastructure and transferability
The better prepared the business, the stronger the buyer interest, deal terms, and potential timeline..
Step 3: Go to Market Confidentially
Confidentiality is critical in all close-knit business communities, especially Nebraska and the Midwest. Deals are marketed using:
- Blind profiles (no name disclosed)
- Controlled buyer screening
- NDAs before releasing customized Confidential Information Memorandum (CIM) & Financials
This protects employees, customers, and vendors.
Step 4: Evaluate Buyers and Offers
The best offer is not always the highest price. Owners should evaluate:
- Buyer experience
- Financing certainty
- Earn-outs or Seller Notes (Seller Financing)
- Cultural fit
- Likelihood and timeline of closing
Step 5: Due Diligence and Closing
Once under LOI, buyers conduct financial, legal, and operational due diligence. Well-prepared sellers move through this phase faster and with fewer renegotiations when they are prepared and respect the "Deal Goodwill Window"
Final Thoughts
Selling a business is a structured, strategic process--not a transaction to rush. Owners who plan early and work with an experienced Business Broker/M&A Advisor typically achieve higher valuations and smoother exits.
If you’re considering selling in the next 1–3 years, understanding your value today is the first step. See DSA's Business Valuation page to learn more.
5 Common Mistakes Owners Make When Selling Their Company
Selling a business is one of the most significant financial transactions a business owner will ever make. Yet many owners unknowingly damage the potential value of their company, reduce leverage and/or options; or derail a deal entirely, by making avoidable, yet far too common mistakes.
As a business brokerage and M&A advisory firm based in Omaha, Nebraska and serving the greater Nebraska and Nationwide markets, we see these missteps repeatedly. The great news? With proper planning and the right guidance, they are entirely preventable.
Below are five (5) of the most common mistakes we see business owners make when selling their company, and how to avoid them.
1) WAITING TOO LONG TO PREPARE
One of the biggest mistakes business owners make--and we cannot stress this one enough--is waiting until they’re “ready to sell” before preparing for a sale. In reality, the strongest exits are planned years in advance, not weeks or months.
Preparation impacts everything . . . financial performance, operational efficiency, management structure, and ultimately valuation. Owners who wait until burnout, health issues, or external pressures force a sale often find themselves negotiating from a position of weakness.
Best practice: Begin exit planning early. Advance preparation gives you leverage, flexibility, and options--whether you sell now or later.
2) POOR OR DISORGANIZED FINANCIAL RECORDS
Clean, accurate, and well-documented financials are essential for any successful transaction. Buyers, their advisors, and lenders expect clear profit and loss statements, balance sheets, tax returns, and explanations for add-backs.
Disorganized or inconsistent records slow down due diligence, reduce buyer confidence, and often result in price reductions or failed deals.
Best practice: Schedule a time to discuss what getting your financials documentation in order well before going to market looks like. Strong records signal professionalism and reduce perceived risk.
3) TRYING TO "WING IT" ALONE OR WAITING TOO LONG TO ENGAGE A PROFESSIONAL
Selling a business is complex, confidential, and high-stakes. Owners who attempt to manage the process alone--or wait too long to engage a professional advisor--often make costly mistakes in pricing, negotiations, deal structure, or confidentiality.
An experienced business broker and M&A advisor acts as a buffer, strategist, and advocate--protecting your interests while maximizing value.
Best practice: Engage a professional, ideally DSA, early! The right advisor helps you avoid pitfalls, attract qualified buyers, and navigate and plan the process with confidence.
4) LOSING FOCUS ON DAY-TO-DAY OPERATIONS
Once a business is for sale, or far too many times well before the business is actually for sale (and this typically isn't done purposefully by an owner, it is the result of committing mistake #1) some owners unintentionally shift their focus away from operations. This can lead to declining revenues, employee uncertainty, and weakened performance--exactly when stability matters most.
Buyers purchase future cash flow, not past performance. Any operational dip during the sale process or the preceding year(s) can directly impact value.
Best practice: Keep the business running strong until the day it closes. A well-managed company commands better terms, smoother negotiations and due diligence, and a higher likelihood of a smoother post-exit experience for you and your legacy.
5) IGNORING BUYER QUALITY
Not all buyers are created equal. Focusing solely on the highest offer without evaluating buyer qualifications is a common and costly mistake.
Unqualified buyers can waste months of time, fail to secure financing, or walk away late in the process. In contrast, a well-capitalized, motivated buyer often leads to a smoother closing and better overall outcome.
Best practice: Prioritize buyer quality, financial capability, and deal structure--not just headline price.
FINAL THOUGHTS: PREPARATION AND THE RIGHT GUIDANCE PROTECTS VALUE AND YOUR LEGACY
Most failed or underperforming business sales trace back to lack of preparation and right wrong-- or no--guidance from a professional. Owners who plan early, understand the market, and work with the right professional protect not only the value of their business, but their options.
Are you guilty of--or worried about--making any of these mistakes? We are not here to point a finger, we are here to help because unlike other brokers/advisors, we have been in your shoes or seen how these mistakes have affected businesses and business owners in real-time. Now is the time to start the conversation. Owners who prepare early with the right help put themselves in the strongest possible position for a successful exit.
Click on the link below to discuss your goals, your timeline, and how to position your business for a smooth, high-value sale.
Leasing vs. Owning Your Business Space
When It Is Time To Consider Buying
For many business owners, leasing commercial space is the default.
It’s flexible, requires less upfront capital, and feels like the safer option—especially in the early years.
But as your business stabilizes, continuing to lease may come with an overlooked cost: missed opportunity.
If you’ve been in business for several years and rely on your physical location, it may be time to evaluate whether purchasing your space could better support your long-term goals.
The Shift: From Tenant to Strategic Owner
Owning your commercial real estate is not just about replacing rent with a mortgage.
It’s about shifting from a short-term expense to a long-term asset that can support:
- Business growth
- Wealth creation
- Exit planning & optionality
This is especially relevant for businesses in:
- Industrial and warehouse space
- Retail locations
- Office-based operations
- Mixed-use properties
Key Benefits of Owning Your Business Space
1. Control Over Your Location
When you lease, your business is tied to a landlord’s decisions.
When you own, you control:
- Lease terms (if you occupy through an entity)
- Property use
- Long-term occupancy
This becomes especially important when your business depends on location, infrastructure, or customer access.
2. Building Equity Instead of Paying Rent
Monthly lease payments build value for your landlord.
Ownership allows you to:
- Build equity over time
- Benefit from property appreciation
- Convert a fixed expense into a long-term asset
3. Increased Business Valuation
One of the most overlooked advantages is how ownership can impact your eventual sale.
Owning your real estate can:
- Make your business more attractive to buyers
- Provide additional deal structure options
- Create separation between operating business and real estate assets
4. Additional Income Opportunities
If your building has more space than you need, ownership opens the door to:
- Leasing unused space to tenants with the potential for your occupancy and growth down the road without having to relocate
- Offsetting your occupancy costs
- Creating an additional income stream
5. Tax and Structural Advantages
Depending on how the property is structured, business owners may benefit from:
- Depreciation
- Expense deductions
- Strategic entity structuring to spread out tax payments
6. More Control When It’s Time to Sell
Owning your real estate gives you flexibility that tenants don’t have.
You can:
- Sell the business and retain the real estate (spread out tax requirements while receiving a short & long term income plan)
- Lease the property to a buyer
- Sell both together for a larger transaction
This flexibility can significantly impact your exit strategy.
When Buying May NOT Make Sense
Owning commercial real estate is not the right decision for every business owner.
It may not be a good fit if:
- Your business has an uncertain future or location needs
- You expect to exit in the near term
- You need to preserve capital for growth
The key is alignment between your business trajectory and your real estate strategy.
Why Strategy Matters More Than the Purchase
The biggest mistake business owners make is treating this as a simple real estate decision.
In reality, it’s a multi-layered strategy decision involving:
- Business operations
- Real estate economics
- Legal structure
- Exit planning
How you structure ownership can impact everything from taxes to valuation.
If your business is stable and dependent on its location, continuing to lease without evaluating ownership could mean leaving significant value on the table.
The right move depends on your specific situation—but it’s worth understanding your options.
After Reading: A Practical First Step For You
Most business owners don’t need a full commitment to explore this. A simple, data-driven model can answer questions like:
- Would owning cost more or less than leasing?
- How would this impact cash flow?
- What does this look like over 5–10 years?
- How could this affect a future sale?
If you’re a business owner and want to explore whether this makes sense for you, I offer a free, confidential model based on your business.
No pressure, no commitment—just a clear analysis to help you make an informed decision.
Reach out directly to get started.
"What Is My Business Actually Worth?"
Business Value is About More Than Just Your Financials
For almost all business owners, one of the biggest questions they eventually ask is: “What is my business actually worth?”
The answer is rarely as simple as applying a generic multiple from something found online. Every business is different, and valuation depends on a combination of financial performance, risk, industry dynamics, growth opportunities, and how attractive the business is to potential buyers.
At Dodge Street Advisors, we work with business owners throughout Omaha and the surrounding region who want to better understand the value of what they’ve built--whether they are preparing to sell soon or simply planning ahead for the future.
One of the most common misconceptions is that revenue, SDE, Net Income, etc alone determines value.
In reality, buyers are usually focused more heavily on:
- Profitability
- Cash flow
- Risk
- Operational stability
- Growth potential
- Customer concentration
- Management structure
- Industry outlook
A business generating $5 million in revenue with inconsistent earnings and heavy owner dependence may be less valuable than a smaller company with strong recurring cash flow and systems in place.
EBITDA Often Drives Valuation
For many privately held lower middle market businesses, valuation is commonly based on EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
Buyers often apply a multiple to adjusted EBITDA to estimate value.
However, there is no universal “correct” multiple.
That multiple can vary significantly depending on factors such as:
- Industry
- Size of the business
- Customer diversification
- Growth trends
- Recurring revenue
- Strength of management
- Market conditions
- Seller dependence
Two companies with similar revenue can have dramatically different valuations depending on these factors.
Buyers Evaluate Risk
At its core, valuation is often a reflection of perceived risk.
Buyers generally pay higher multiples for businesses that are:
- Well organized
- Financially transparent
- Less dependent on the owner
- Operationally consistent
- Growing steadily
- Diversified across customers and vendors
Businesses with unclear financials, customer concentration, inconsistent earnings, or operational dependence on the owner may receive lower valuations or face challenges during a sale process.
Timing Matters More Than Many Owners Realize
Another important factor is timing.
Many owners wait too long to begin preparing for a potential exit. Ideally, valuation and exit planning discussions should begin years before a sale process starts — not months.
Understanding value early allows owners to:
- Identify opportunities to increase value
- Improve operational weaknesses
- Organize financial reporting
- Reduce perceived buyer risk
- Prepare for a smoother transition
Even small improvements made over time can significantly impact valuation.
Online Valuation Calculators Only Tell Part of the Story
Online calculators can sometimes provide a rough estimate, but they rarely capture the full picture of a privately held business.
A meaningful valuation discussion typically involves:
- Financial analysis
- Industry considerations
- Market conditions
- Deal structure considerations
- Buyer demand
- Qualitative operational factors
That’s why many business owners benefit from having confidential conversations with an experienced advisor before making major decisions.
Understanding Your Value Is Part Of Good Planning
You do not need to be ready to sell your business tomorrow to understand what it may be worth today.
For many owners, understanding value is simply part of good long-term planning.
Whether your timeline is one year away or five years away, knowing where your business stands can help you make more informed decisions moving forward.
If you would like to discuss your business confidentially or request a business valuation, Dodge Street Advisors is always happy to start the conversation.
What Increases the Value of a Business Before a Sale?
Business Value is About More Than Just Your Financials
Many business owners spend years building revenue, customers, and reputation — but when it comes time to sell, buyers often evaluate much more than top-line growth alone.
One of the most important things owners can do before a future sale is understand what actually drives business value from a buyer’s perspective.
At Dodge Street Advisors, we regularly work with business owners throughout Omaha and surrounding areas who want to better position their business long before going to market.
Strong Financial Organization Matters
Well-organized financials can significantly impact buyer confidence.
Buyers typically want to see:
- Accurate profit and loss statements
- Clean balance sheets
- Tax returns
- Consistent reporting
- Clear add-backs and adjustments
- Revenue trends
Businesses with organized financial reporting are generally easier to evaluate and often create smoother transaction processes.
Reduce Dependence on the Owner
One of the biggest factors buyers evaluate is how dependent the business is on the current owner.
If the owner handles:
- Most customer relationships
- Key operational decisions
- Sales
- Vendor management
- Employee oversight
…the business may be viewed as riskier during a transition.
Businesses with strong management teams, documented processes, and operational systems in place are often more attractive to buyers.
Recurring and Predictable Revenue Helps
Buyers value stability.
Businesses with recurring revenue, long-term customer relationships, service agreements, or predictable cash flow often receive stronger interest because future earnings are easier to forecast.
Even businesses without formal recurring revenue models can improve value through customer retention and diversified revenue streams.
Customer Concentration Can Impact Value
If a large percentage of revenue comes from only one or two customers, buyers may view the business as carrying additional risk.
Diversifying the customer base over time can strengthen buyer confidence and improve overall marketability.
Growth Potential Matters
Buyers are not only purchasing current performance — they are also evaluating future opportunity.
Businesses that demonstrate:
- Consistent growth trends
- Expansion opportunities
- Scalable operations
- Strong market positioning
…are often viewed more favorably during a sale process.
Preparation Creates Optionality
Many owners wait until they are ready to retire before thinking about value enhancement.
In reality, the best time to begin preparing is often years in advance.
Small operational improvements made consistently over time (i.e. 1% Rule) can have a meaningful impact on valuation, buyer interest, and transaction flexibility.
Understanding what buyers prioritize today can help owners make stronger long-term decisions for the future.
At Dodge Street Advisors, we work confidentially with business owners throughout Omaha and surrounding areas to help them better understand valuation drivers, readiness, and exit planning opportunities.
What Documents Do You Need to Prepare to Sell a Business?
One of the most common challenges business owners face during a sale process is document preparation.
Many owners underestimate how much information buyers, lenders, accountants, and attorneys may request throughout a transaction.
Preparing documentation early can help:
- Reduce delays
- Improve buyer confidence
- Support valuation
- Create a smoother transaction process
Financial Documents
Financial transparency is one of the most important parts of any sale process.
Buyers will typically request:
- Profit and loss statements
- Balance sheets
- Business tax returns
- Accounts receivable and payable reports
- Debt schedules
- Revenue breakdowns
Well-organized financials help buyers evaluate the stability and performance of the business.
Operational Information
Buyers also want to understand how the business operates day to day.
This may include:
- Employee information
- Organizational charts
- Vendor relationships
- Customer concentration details
- Operational procedures
- Software systems
- Equipment lists
Businesses with documented systems and organized operational information are often viewed more favorably.
Legal and Corporate Documents
Depending on the business structure and industry, buyers may also request:
- Corporate formation documents
- Operating agreements
- Leases
- Licenses and permits
- Insurance policies
- Customer contracts
- Vendor agreements
Having these materials organized early can help prevent unnecessary complications later in the process.
Selling Preparation Starts Earlier Than Most Owners Think
Even if a sale is years away, organizing financial and operational information today can improve readiness and flexibility for the future.
At Dodge Street Advisors, we work confidentially with business owners throughout Omaha and surrounding areas to help them better prepare for future opportunities and understand what buyers typically expect during a transaction process.
Preparation Helps Reduce Stress
Many owners are still actively running their business while navigating a potential sale.
Trying to gather years of information under pressure can quickly become overwhelming.
Preparing documentation in advance often creates a more efficient and less stressful process for everyone involved.
At Dodge Street Advisors, we often encourage owners to begin organizing important information well before formally going to market. We are here to help with that too -- click on the link below to get started.
PART 1 — FROM TENANT TO OWNER
From Tenant to Owner: What Is Your Business Real Estate Strategy?
Your business is paying the rent.
But have you ever stopped to ask yourself what that rent is helping you build?
For many established business owners, leasing their space is simply part of doing business. The lease gets renewed, the rent gets paid, the business keeps operating, and everyone moves on.
But what if your current lease, an upcoming renewal, a growing business, or a desire for greater control is actually a reason to take a closer look at the real estate underneath your business?
Should you continue leasing—or could owning your business property create a better long-term strategy?
The answer is not the same for every business. Buying commercial real estate brings its own costs, responsibilities, risks, and considerations. Leasing can make perfect sense for many businesses.
But for the right business owner, owning the property can create something leasing generally does not:
an additional asset—and additional optionality.
Your Business and Your Real Estate Are Two Different Assets
One of the first things I encourage business owners to consider is whether they are looking at their operating business and their real estate as two separate assets.
They often aren't.
A business owner may think:
“This is where my business operates. We need a building, so we pay rent.”
But there is another way to look at it:
“My business needs a place to operate. What if the real estate required to operate that business could also become an asset that I own?”
That distinction can change the conversation.
Instead of viewing the building exclusively as an operating expense, ownership creates the possibility of building equity in a separate real estate asset over time.
And that is where the discussion gets interesting.
What Could Ownership Potentially Create?
There is no universal formula that says owning is better than leasing. The economics need to be evaluated on a case-by-case basis.
But there are several potential advantages worth considering.
1. Control
When you own the property, you have a different level of control over your business's physical location.
You aren't making decisions solely within the parameters of a landlord's ownership and lease terms.
Depending on the property and circumstances, ownership may give you greater ability to make decisions about improvements, expansion, use of the property, and the long-term direction of the location.
For a business that has invested heavily in its space—or operates from a highly specialized location—that control can be particularly meaningful.
2. Equity and Wealth Creation
When you lease, your payments provide you with the right to occupy the property.
When you own, part of your long-term economic commitment to the property may instead contribute to an asset that belongs to you.
As a result, ownership can potentially create equity in the real estate through principal paydown and changes in property value over time.
Neither outcome is guaranteed, and commercial real estate carries its own market and ownership risks. But the fundamental distinction is important:
You aren't simply occupying the asset. You own it.
That can make commercial real estate an important part of a business owner's broader wealth strategy.
3. Potential Collateral and Financial Flexibility
Real estate ownership can also create an asset that may have value beyond the business's physical location.
Depending on the owner's financial circumstances, the property, its equity, and its financing structure may provide additional opportunities for future borrowing or collateral.
This is highly fact-specific and should be evaluated with the appropriate financial and lending professionals.
The larger point is that ownership can create another asset on the owner's balance sheet that simply would not exist in the same way if the business remained a tenant.
4. Potential Tax and Depreciation Considerations
Commercial real estate ownership can also come with tax and depreciation considerations that may be relevant to an owner's overall financial strategy.
Those opportunities that may be unlocked are highly dependent on the ownership and transaction structure and should be evaluated with the owner's tax advisor.
But they are another reason that the decision deserves more than a simple comparison of monthly rent versus monthly mortgage payment.
The Part Business Owners May Overlook: Optionality
This may be the most important consideration of all.
Optionality.
If you own both your operating business and the real estate it occupies, you may have more choices when circumstances change.
And business owners know that circumstances change. Maybe you eventually want to sell the business. Maybe you want to retire but keep an income-producing asset. Maybe the next generation wants the business but doesn't want the real estate. Maybe a buyer wants the business but doesn't want to purchase a commercial property at the same time.
Maybe the real estate has become more valuable than you ever anticipated.
Owning the real estate can potentially give you choices that you wouldn't have if you were simply a tenant.
For example, at some point you may have the option to:
- Sell the business and the real estate together.
- Sell the business but retain the real estate and potentially lease it to the new business owner.
- Sell the real estate separately from the operating business.
- Retain the real estate as an investment after exiting the operating business.
The appropriate structure will depend on the business, the property, the market, the buyer, financing, tax considerations, and the owner's objectives.
But that's exactly the point.
Again, Ownership can create optionality.
Think About the Exit Before You Need One
This is particularly important for established business owners.
Many owners don't think about the eventual sale of their business until they are ready to sell. By then, some of the decisions that could have created additional flexibility years earlier are already behind them.
Real estate is a good example. If you own the building, the eventual sale of your business doesn't necessarily have to mean the sale of the building.
That can fundamentally change the conversation.
The operating business and the real estate can potentially be evaluated as separate assets with separate values, buyers, and objectives.
That doesn't mean separating them will always produce a better result.
Sometimes selling the business and real estate together may be exactly the right strategy.
The important thing is having options.
So, Should You Buy Your Building?
Maybe. And maybe not.
That is the honest answer.
Owning commercial real estate isn't automatically better than leasing it. A property can require capital, maintenance, management, financing, and a long-term commitment. The property itself has to make sense, and the business has to be in a position where ownership fits its broader objectives.
But if you are an established business owner who:
- has been leasing the same space for years;
- is approaching a lease renewal;
- operates from a specialized or difficult-to-replace location;
- expects to remain in the same market for the foreseeable future;
- has a growing business that needs more space; or
- simply has never seriously evaluated the ownership alternative, it may be worth running the numbers and looking at the strategy.
Not because you should automatically buy.
Because you should know what your options are.
Look at the Business AND the Real Estate
At Dodge Street Advisors, we look at these decisions from three perspectives—business brokerage, commercial real estate, and legal/transactional strategy.
That perspective matters because a decision about your building isn't necessarily just a real estate decision.
It can affect your business operations.
It can affect your balance sheet.
It can affect your long-term wealth strategy.
And eventually, it can affect how you sell or transition your business.
The question isn't simply:
“Should I lease or should I buy?”
A better question may be:
“What real estate strategy gives me the most flexibility to accomplish what I want with my business?”
That's a much bigger question.
And sometimes, the answer starts with buying the building.
But what happens if you already own the building?
What if you've spent years building equity in your business real estate and you've reached the point where you would rather have that capital working somewhere else?
Could you sell the real estate, lease it back, and continue operating your business in the same location?
That's the subject of Part 2 of The Business Owner's Real Estate Strategy: From Tenant to Owner—and Back Again.
If you're a business owner considering buying your current space, acquiring a different property, selling your business, or unlocking equity from property you already own, let's have a conversation.