Selling a Business in 2026: The Ultimate Dos and Don'ts Guide (From an Austin Wealth Manager)

Selling your business is probably the biggest financial transaction you'll ever make.

And in 2026, the stakes have never been higher.

Private equity firms and strategic buyers are sitting on more than $1 trillion ready to deploy. Interest rates are stabilizing. Valuations are holding steady. For many business owners, this is the exit window they've been waiting for.

But here's the uncomfortable truth: only 25% to 33% of small to mid-sized businesses listed for sale actually find a buyer.

I've sat with dozens of business owners here in Austin over the years. Some walked away with life-changing money. Others left millions on the table because they made avoidable mistakes.

After watching this play out over and over, I've learned that the difference between a great exit and a mediocre one isn't luck. It's preparation, timing, and knowing what NOT to do.

Here's your complete guide to selling a business in 2026.

The 2026 Market Landscape: What You Need to Know

Before we dive into the dos and don'ts, let's talk about what makes 2026 different.

Private equity firms have record amounts of dry powder. According to recent industry data, PE firms are sitting on over $1 trillion in capital waiting to be deployed. They need to put this money to work, which means competition for quality businesses is high.

Valuations are holding steady. Most small to mid-sized businesses are selling for 3x to 7x EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Where you land in that range depends on your growth trajectory, margin stability, and market position.

Buyer expectations are more sophisticated. Buyers in 2026 aren't just looking at your revenue. They're scrutinizing your financials, customer concentration, contracts, team strength, and how defensible your market position is.

The process takes longer than you think. From initial outreach to closing, expect six to twelve months if everything goes smoothly. And a totally seamless process is rare.

Bottom line: if you're thinking about selling in 2026, you should already be preparing. The owners who get the best deals don't start six months before listing. They start 18 to 24 months before.

THE DOS: What Actually Works

DO #1: Start Preparing 18 to 24 Months Before You Want to Sell

The single biggest mistake I see? Waiting too long to prepare.

Buyers pay a premium for predictability and low risk. They want to see 3 to 5 years of clean, growing financials. If you start preparing now, you ensure that your 2025 and 2026 fiscal years look perfect when buyers scrutinize them.

Use this time to clean up your financials, reduce owner dependence, and document your processes. Fix the problems you've been ignoring. Hire that key employee. Diversify your customer base.

Think of it this way: you're not just selling a business. You're selling a story. And the best stories take time to write.

DO #2: Get a Professional Valuation Early

One of the most common mistakes business owners make is overpricing their business based on what they think it's worth, not what the market will pay.

Your friends' opinions don't matter. Public market multiples don't apply to private businesses. Your emotional attachment to the company has zero bearing on valuation.

Work with a capital advisor or M&A professional who knows current market comparables. Get a realistic valuation based on:

Your industry's typical multiples
Your EBITDA margins
Your growth trajectory
Your customer concentration
The transferability of your business

In 2026, most small to mid-sized businesses sell for 4x to 8x adjusted EBITDA, but that range is huge. A mature company in a stable industry with steady cash flow might trade at 5x EBITDA, while a high-growth tech company could command 10x or more.

Know your number before you go to market.

DO #3: Hire the Right Team

If you engage with a buyer who has experience purchasing companies and a strong advisory team, but you attempt to go it alone, you will be at a disadvantage.

Assemble a team of professionals experienced in selling businesses:

Investment banker or business broker: They manage the process so you can keep running your business (because nothing tanks a valuation faster than revenue dropping during the sale process).
M&A attorney: Not your general practice attorney. Someone who specializes in business sales and knows the unique terms, language, and deal structures.
CPA: To clean up your financials and help with tax planning.
Wealth manager: To plan for what happens after the sale (more on this later).

Yes, these professionals cost money. But the value they create far exceeds their fees. I've seen advisors negotiate terms that added hundreds of thousands to the final sale price.

DO #4: Clean Up Your Financials

Buyers want full visibility into your financials to reduce the risk of a bad deal.

CPA-prepared financial statements will attract more buyers and shorten the time needed for due diligence, meaning you can sell faster.

Here's what to focus on:

Stop running personal expenses through the business. Even if the deductions are legitimate, they lower the earnings of your business and require explanation. Scale back on them in anticipation of a sale.

Restate financials to reflect true earning potential. Many privately held companies minimize reported profits for tax efficiency. This hurts valuation. Prepare restated financials that show owner add-backs and the company's actual operational performance.

Tighten up accounts receivable and payable. Clean AR/AP signals operational discipline and makes your business look well-run.

Improve inventory turns. If you're carrying excess inventory, that's capital tied up that buyers will scrutinize.

The last three years of business performance are critical to a buyer's perception of value. Make sure those years tell a strong story.

DO #5: Reduce Owner Dependence

If your customers do business with your business because of you, the business is too dependent on you.

Take yourself away from customer interactions and delegate that to a salesperson or account manager. Otherwise, a buyer will see those relationships as having low transferability.

Build a management team that can run the business without you. Buyers pay more for businesses that are ready to scale, not businesses that collapse when the owner leaves.

Strengthen your leadership team now. Document your processes. Make yourself replaceable.

DO #6: Diversify Your Customer Base

If any single customer makes up 10% or more of your business's revenue, a buyer will worry.

What happens if that customer leaves after the sale? Revenue drops by 10% or more, and the buyer's investment tanks.

If customer concentration is too high, you may only get incremental portions of revenue after a sale, conditioned on those customers remaining with the business after closing.

No single client should account for more than 10% to 15% of your revenue. Add enough customers and diversify to decrease dependency on any single or small group of customers.

DO #7: Have a Clear Post-Sale Plan

Many business owners fail to plan for what comes next, both financially and emotionally.

For many founders, the business has been the biggest piece of their life for 20 or 30 years. When it's gone, the void can cause major emotional upheaval, including higher instances of divorce and general dissatisfaction with life.

Work with a financial planner and tax advisor before initiating a sale. Understand:

How much you'll net after taxes
What your lifestyle will cost in retirement
Whether you need structured payouts (earnouts, seller financing) to reduce tax burdens
What you'll DO after the sale (volunteering, traveling, starting a new business)

Don't wait until after the sale to figure this out. Plan now.

DO #8: Maintain Business Performance During the Sale Process

It's easy to become so focused on selling the company that you become distracted from growing it profitably.

If financial performance declines during the process, the buyer will alter the sale price or deal structure to compensate.

Keep your eye on the ball. Revenue must stay strong. Customers must stay happy. Employees must stay engaged.

Nothing kills a deal faster than declining performance mid-process.

DO #9: Understand the Different Types of Buyers

There are basically three types of buyers, and each values your business differently:

Strategic acquirers: Companies in your industry or adjacent to it. They usually pay more because they see synergies (cost savings, cross-selling opportunities, market expansion).

Financial buyers: Private equity firms and search funds. They're looking for strong cash flow and growth potential. They often use leverage and may require you to roll over equity.

Individual buyers: Owner-operators looking for their next chapter. They typically pay less but may care more about preserving your legacy and culture.

Know who you're talking to and what they value. It changes how you position your business.

DO #10: Be Prepared to Articulate Future Upside

Buyers don't just want to know what your business has done. They want to know what it CAN do.

Be ready to articulate:

Market opportunities you haven't tapped yet
Competitive advantages that are defensible
Potential scalability (can this business 2x or 3x with the right capital and team?)
Product or service expansion opportunities

The businesses that command premium valuations are those that show not just strong past performance, but clear future growth potential.

THE DON'TS: Costly Mistakes to Avoid

DON'T #1: Wait Until Your Business Is in Trouble

The best time to sell a business is when it's doing well. If you wait until sales start to dwindle, your health deteriorates, or you become desperate, it may be too late to attract a good offer.

Sell from a position of strength, not weakness.

If possible, sell when business profits have been on a regular increase for 2 to 3 years and operations have been in a steady place. A continuous downslope makes it hard to justify a seller's desired value.

DON'T #2: Limit Yourself to One Buyer

Some owners enter into an agreement with one party assuming it will be a done deal. But it may not be the best deal.

Lack of competition places the buyer in the driver's seat. Meanwhile, you have no way of knowing if you realized the full deal potential.

Engage in a full or limited competitive process to maximize the likelihood of obtaining the best offer and terms. Multiple interested buyers create leverage.

DON'T #3: Treat Confidentiality Lightly

You've decided to sell your business and can't wait to tell your friends and family. No problem, right?

Wrong.

Until a transaction is completed, sharing the news of your pending sale could negatively impact the value of your business.

Competitors will use the information to go after your customers. "Did you hear ABC Company is selling? They're probably in trouble. You should work with us instead."

Employees will become distracted and worry about their future job security. Key employees might start looking for new jobs. Morale drops. Performance suffers.

Keep your plans to yourself and the inner circle of people involved in the M&A process. Everyone else, like potential buyers, should sign an NDA before being informed that your business is for sale.

A good broker will always market your business with discretion, never identifying your company name or giving details that might allow people to recognize it.

DON'T #4: Accept a Vague Letter of Intent

The Letter of Intent sets the stage for an agreement that can unlock the greatest value for you. Without specifics, the buyer can change value, terms, and structure throughout the process.

Ask your investment banker for a process letter outlining what the LOI should spell out, such as the basis for the sale price, payment terms, earnout structures, non-compete requirements, and transition expectations.

A vague LOI gives the buyer room to renegotiate everything during due diligence. Get specifics upfront.

DON'T #5: Focus Only on Price

Too many business owners focus only on getting the desired price, but there are other considerations that can turn a full-price offer into a bad deal.

You need to determine:

How much you'll pay in closing costs
Income taxes on the sale
Whether the deal structure includes earnouts (where you only get paid if certain performance targets are met post-sale)
Non-compete and confidentiality requirements
How much you'll be required to stay involved after the sale
Whether there are noncash benefits that could make a lower-priced bid more desirable

Deal structure matters as much as price. An offer with a high multiple but significant earnout risk and extended seller involvement might be worse than a lower multiple with clean cash at close.

DON'T #6: Rush the Sale

Selling your business in a rush can force you to lose leverage.

There may be several reasons beyond your control that have you in a time pinch to sell. Having your business prepared for a sale at all times can help minimize any time pressure to accept sub-par terms or price.

Patience can be one of the most effective negotiating tools. Allow yourself enough time to ensure you're choosing the best buyer available.

Plan, plan, plan.

DON'T #7: Neglect to Restrict Key Personnel

Buyers expect you to lock up key team members with non-compete and non-solicitation agreements, reducing their odds of losing essential staff or customers after the deal closes.

If your top salesperson, lead developer, or operations manager can walk out the door and take half your clients with them, that's a massive risk for the buyer.

Ask legal counsel which restrictions are acceptable in your industry and fit within your culture. Get these agreements in place before you go to market.

DON'T #8: Mix Personal and Business Finances

It's not uncommon for business owners to combine business or personal funds and taxes into the same entity. This makes it very difficult, if not impossible, to separate revenue and expenses, and for an acquirer to be comfortable with the numbers.

Clean separation between personal and business finances is non-negotiable if you want a smooth sale.

DON'T #9: Try to Do It Yourself to Save Money

Many entrepreneurs are experts in business management, but few have expertise in selling companies.

Some owners, hoping to save money, are hesitant to hire professionals such as brokers, outsourced CFOs, financial advisors, investment bankers, or lawyers to help with the sale.

But this do-it-yourself attitude can lead to unforeseen consequences that can be more costly to resolve than paying for professional assistance.

I've seen owners try to negotiate their own deals and lose $500,000 in value because they didn't understand earnout structures, escrow requirements, or reps and warranties.

The fee you pay an advisor will be a fraction of what you'll save by avoiding tax pitfalls, legal mistakes, and bad deal terms.

DON'T #10: Completely Disengage After Hiring a Broker

After you've hired a broker or investment banker, don't get completely disengaged from the process. Many sellers make this mistake, thinking that the broker alone will be enough to handle the M&A process.

Stay involved. Attend meetings. Review materials. Be available for buyer questions.

Your broker is managing the process, but you're still the one who knows your business best. Buyers want to meet you. They want to hear your vision. They want to feel confident that you're committed to a smooth transition.

Special Considerations for 2026

Tax Law Changes You Need to Know

The estate tax exemption is now $15 million per person in 2026 (thanks to the One Big Beautiful Bill Act signed in July 2025), up from the previous scheduled drop to $7 million.

For business owners, this is significant. If you're planning to pass your business to heirs rather than sell it, the higher exemption gives you more flexibility.

But if you're selling, work with a tax advisor to structure the deal in the most tax-efficient way possible. Asset sales vs. stock sales, installment sales, qualified small business stock exemptions, and opportunity zone investments can all impact your tax bill.

Private Equity Is Active, But Selective

Private equity firms have over $1 trillion in dry powder, but they're deploying it cautiously. They're focusing on businesses that demonstrate resilience, scalability, efficiency, and cash flow visibility.

If you're targeting PE buyers, emphasize:

Recurring revenue
High EBITDA margins (20%+ is attractive)
Diversified customer base
Strong management team that can operate without you
Clear growth opportunities

Pure revenue expansion is no longer enough to justify premium pricing. Buyers want profitability and defensibility.

Due Diligence Is More Rigorous

Due diligence in 2026 takes longer and involves more requirements than it did five years ago.

Buyers will request:

3 to 5 years of financial statements
Customer contracts and concentration analysis
Employment agreements and organizational charts
Intellectual property documentation
Compliance and legal records
Technology stack and cybersecurity protocols

Have all of this ready in a virtual data room before you go to market. The faster you can move through due diligence, the less likely the deal falls apart.

What Happens After the Sale?

Let's talk about the part most business owners don't think about until it's too late: what comes next.

According to the Exit Planning Institute, 80% to 90% of owners have their financial wealth locked up in their companies. When they sell, they suddenly have liquid wealth, but no plan for it.

Here's what you need to think about:

Immediate Tax Planning

The year you sell your business, you'll likely have the highest income of your life. Work with a CPA and wealth manager to:

Defer income where possible
Maximize retirement contributions
Consider charitable giving strategies (donor-advised funds, charitable remainder trusts)
Evaluate opportunity zone investments
Plan for estimated tax payments

Don't wait until April to think about taxes. Plan in the year of sale.

Wealth Preservation Strategy

You just got a check for $5 million, $10 million, maybe more. Now what?

This is where most business owners make costly mistakes. They either:

Invest too conservatively and don't keep pace with inflation
Invest too aggressively and take on unnecessary risk
Make emotional decisions based on market noise

Work with a wealth manager (ideally before the sale) to create a plan that:

Aligns with your risk tolerance and time horizon
Generates the income you need to fund your lifestyle
Preserves capital for the next generation
Optimizes for tax efficiency

Finding Purpose Beyond the Business

For many founders, the business has been their identity for 20, 30, even 40 years. When it's gone, the void can be devastating.

Before you sell, ask yourself:

What will I do with my time?
What gives me purpose and meaning?
Do I want to start another business, consult, volunteer, travel, spend time with family?
How will my spouse and I navigate this transition together?

Don't underestimate the emotional side of selling. Plan for it just like you plan for the financials.

Your Next Steps

If you're thinking about selling your business in 2026, here's what you should do this month:

Get a realistic valuation. Know what your business is actually worth, not what you hope it's worth.
Assess your readiness. Are your financials clean? Is your customer base diversified? Can your business run without you?
Assemble your advisory team. Find a business broker, M&A attorney, CPA, and wealth manager who specialize in business sales.
Start grooming the business. Fix the problems. Build the team. Document the processes.
Plan for what comes next. Talk to your spouse. Think about your purpose. Map out your post-sale life.

Selling a business is complicated, emotional, and high-stakes. But with the right preparation, the right team, and realistic expectations, it can also be incredibly rewarding, both financially and personally.

The window in 2026 is wide open. Private equity has capital to deploy. Valuations are holding. Buyers are active.

The question is: will you be ready?