Tried to sell my lower, middle market business 4 times over 30 years before it worked. Here’s what I learned from the experience.

I spent 30 years building my healthcare media business (we were the first company to broadcast live surgeries on the internet – first one was over dial-up internet haha) before selling it to private equity in 2020. But we failed to sell it FOUR times before that.

Attempt 1 – Week 2 of due diligence: Public company walked away after realizing our finances were a mess. We were still doing our own bookkeeping and quarterly reporting instead of having a proper CFO. Hired one immediately after that embarrassment.

Attempt 2 – Day of closing: After FIVE MONTHS of due diligence, the buyer's investment committee changed their minds. Literally the day we were supposed to close. That one really really hurt.

Attempts 3 & 4: We got approached by public companies directly, started negotiating on our own behalf, realized we had little leverage and were going to get lowballed, so we backed out.

Looking back, here's what were my biggest mistakes:

1. Our business was way too dependent on me – A lot of the sales and growth ran through me. Much of the business was built on my strong ability to sell and find new business. Even though most offers included me staying for some time post sale, potential buyers were still worried about how growth would continue with new leadership. During our last 15 years in businerss we really built out our sales processes and hired for key positions. While this didn't eliminate all concerns, it did help us demonstrate a more diversified way for building and growing the business.
2. Our finances were a mess especially early on – We did all of our finances ourselves for the first few attempts and it showed. Once we hired a CFO after the first 10 years in business, that was a big game changer.
3. Believing you need $10M+ in topline revenue before anyone will take you seriously as a potential seller- This bad advice during my first few attempts kept me from getting professional help during the later years of trying to sell the business. It delayed my timing and kept me pointed at a north star that wasn't even true. There are hundreds of quality lower and middle-market M&A firms who work with businesses well below $10M but with strong EBITDA.
4. Trying to manage the sale process myself – I thought I could handle it since I'd built the business, which was a huge mistake. It's a massive time suck trying to sell while managing the business at the same time. Almost every time the business suffered. Having someone in your corner who's an expert and has a strong process makes all the difference.

What finally worked:

In early 2020, we hired an investment bank focused on the lower middle market. They ran a proper process that created competition among multiple bidders. The leverage came from having 30 interested parties, with 6 serious different buyers competing made all the difference. I stayed on for 3 years as CEO, we grew the business substantially, completed 5 buy-side acquisitions, until I retired in 2023.

What nobody tells you about post-sale:

First month I was so pumped, dreaming of skiing and golf. Then reality hit… I can't do that all the time 24/7.

For the first year I ended up doing some college lecturing on entrepreneurship, now I'm working with my son on buidling something to help other owners avoid my mistakes. We are exploring an exit readiness assessment based on factors that came up in my failed attempts, as well as others I witnessed on the buy-side incl. owner dependence, financial documentation and quality, operational systems, emotional readiness, etc.

We are thinking that it would be a short 10-min assessment covering 11-deal categories and the output would be a personalized 25-page exit report with things like:

• Recommendation on if you're ready to sell now or should wait
• Scoring across relevant business and deal categories
• Realistic valuation ranges
• Risk analysis, including what buyers might see as red flags
• Action plans and timing prioritized by ROI

What I'd love input on from other owners and entrepreneurs in this sub:

• Have you thought about selling your business? What is your biggest concern or worry?
• Does the term "exit readiness" even resonate with you, or do you think about it differently? (For example, "what's my business worth?" or "how do I find a buyer?" or more generally "how do I sell my business?"
• If you could know ONE thing about your preparedness to sell, or the sales process more generally , what would it be?