.svg)
Private equity has $2 trillion in dry powder. Lower Middle Market deals grew 12.8% in 2024. But if your business isn't ready, none of that matters.
The M&A market is heating up.
Here's what's happening right now:
- Private equity firms are sitting on $2-2.6 trillion in dry powder—capital they need to deploy
- Lower middle market M&A activity grew 12.8% in 2024, signaling renewed momentum
- 88% of M&A advisors report that lower middle market dealmaking outperformed or remained in line with the broader market
- The average private equity deal closed at a 7.2x EBITDA multiple in 2024
- Certain sectors are on fire: HVAC, manufacturing, professional services, healthcare, distribution
Translation: Qualified buyers with deep pockets are actively looking for quality businesses to acquire.
This is good news if you're thinking about selling.
But here's the reality check most business owners need to hear:
A hot market doesn't help you if your business isn't ready to sell.
You can have $2 trillion in buyer capital looking for deals, but if your business has owner dependency, customer concentration, messy financials, or weak management, buyers will either pass—or they'll use your weaknesses to low ball you.
The market creates opportunity. But only for businesses that are actually ready.
So here's the question you need to answer honestly: Is your business ready to sell?
Let's find out.
|
The Owner Readiness Gap: Why MostBusiness Owners Aren't Prepared
Here are some statistics that should concern you:
- 78% of business owners do not have a formal transition team in place (M&A advisor, CPA, attorney)
- 70-80% of businesses that go to market never successfully sell
- 75% of business owners who sell report "profound regret" within one year (usually because they didn't maximize value or plan properly)
- 50% of business owners exit unexpectedly due to the "5 D's" (death, disability, divorce, disagreement, distress)
- 73% of privately held companies plan to transition within the next 10 years—but most haven't started preparing
Translation: Most business owners think about selling someday, but they don't actually prepare for it. Then when the time comes—either by choice or by force—they're scrambling, unprepared, and vulnerable.
This is how you leave millions on the table. Or worse, how you fail to sell at all.
The good news? Owner readiness is increasing:
- 68% of business owners received formal exit planning education in 2023, up from just 35% in 2013
- 60% have had their business formally valued within the last two years, up from 18% in 2013
Business owners are getting smarter. The question is: Are you one of them?
The Readiness Assessment: Is YourBusiness Actually Sellable?
Let's do a realistic assessment. Answer these questions honestly—not how you wish things were, but how they actually are today.
Financial Readiness
1. Are your financials clean, accurate, and audit-ready?
- Do you have 3+ years of financial statements (P&L, balance sheet, cash flow)?
- Are they prepared by a qualified accountant or CFO?
- Can you explain every line item and defend your numbers?
- Are personal expenses separated from business expenses?
If no: Buyers will assume you're hiding something or that your numbers are over stated. Either way, you lose credibility and negotiating power.
2. Is your EBITDA margin at least 10%?
- Calculate: EBITDA ÷ Revenue
- Below 10% = below-average financial characteristics
- 10%+ = above-average (commands premium multiples)
If no: You're not maximizing profitability, and buyers will see operational inefficiency.
3. Has your revenue grown at least 10% annually for the past 2-3 years?
- Flat or declining revenue = no growth story
- 10%+ growth = attractive to buyers
If no: You have no momentum, and buyers will assume continued stagnation or decline.
4. Is your customer concentration under control?
- Do your top 3 customers represent less than 40% of revenue?
- Are you diversified across multiple customer segments?
If no: One lost customer could cripple the business—massive red flag.
Operational Readiness
5. Can your business run without you for 3+ months?
- If you took a 3-month vacation, would operations continue smoothly?
- Do key employees know what to do without asking you?
If no: You have owner dependency—one of the biggest value killers.
6. Do you have documented processes and systems?
- Are key operations documented (sales, production, finance, HR)?
- Can new employees learn the business from written procedures?
- Do you use systems and software to manage operations?
If no: Your business runs on tribal knowledge and heroics—not systems. Buyers see risk.
7. Do you have a strong management team in place?
- Do you have at least 2-3 strong managers (COO, CFO, VP Sales, etc.)?
- Can they make decisions without you?
- Are they compensated well enough to stay through a transition?
If no: There's no one to run the business after you leave. Buyers either have to hire expensive leadership or assume the business will struggle.
Strategic Readiness
8. Do you have a realistic valuation?
- Have you had your business professionally valued in the last 12 months?
- Do you understand how buyers in your industry value businesses?
- Do you know your EBITDA multiple range?
If no: You're guessing. And most business owners overestimate their value by30-50%.
9. Do you have a transition team in place?
- M&A advisor (not a broker)
- CPA who specializes in business sales
- Attorney who handles M&A transactions regularly
If no: You're going to make expensive mistakes—or get taken advantage of by sophisticated buyers.
10. Are you emotionally and mentally ready to sell?
- Have you thought about life after the business?
- Do you have a plan for what you'll do with the money?
- Are you prepared to let go and walk away?
If no: You're not ready—and it will show during negotiations. Buyers will sense hesitation and use it against you.
Scoring Your Readiness
Count how many questions you answered "yes" to:
8-10 Yes Answers: You're Ready
Your business is in strong shape. You have clean financials, operational systems, a management team, and a clear understanding of your value. You're positioned to attract quality buyers and command premium multiples.
What to do next: Engage an M&A advisor and start the strategic sale process. The market is hot—this is your window.
5-7 Yes Answers: You're Close, But NotQuite Ready
You have some strengths, but there are gaps that will hurt you in a sale.Buyers will find these weaknesses during due diligence and use them to reduce your price or walk away.
What to do next: Identify your top 2-3 weaknesses and fix them before going to market.This might take 6-12 months, but the difference in sale price will be significant.
0-4 Yes Answers: You're Not Ready(Yet)
Going to market now would be a mistake. You have fundamental issues thatwill either prevent a sale or result in a significantly discounted valuation.
What to do next: Get serious about preparing your business for sale. This will take 12-18months of focused work—but the alternative is leaving millions on the table orfailing to sell at all.
What to Do If You're Not Ready: ThePreparation Playbook
If your readiness score is low, don't panic. Most businesses aren't ready—but readiness is fixable with the right plan and the right team.
Here's what preparation actually looks like:
Step 1: Get a Professional Valuation
Before you do anything else, you need to know what your business is actually worth—not what you hope it's worth.
A professional valuation will:
- Give you a realistic baseline
- Identify value drivers and value killers
- Show you what buyers in your industry care about
- Provide a roadmap for improvement
Timeline: 2-4 weeks
Step 2: Build Your Transition Team
You can't do this alone. Assemble your team:
M&A Advisor:
- Guides strategy and process
- Protects confidentiality
- Negotiates on your behalf
- Manages buyers and timeline
CPA Specializing in Business Sales:
- Optimizes tax structure
- Cleans up financials
- Advises on deal structure
- Minimizes your tax burden
M&A Attorney:
- Reviews and negotiates agreements
- Protects you from legal exposure
- Structures indemnification and escrows
- Handles closing coordination
Timeline: 2-4 weeks to assemble
Step 3: Fix the Major Issues
Based on your readiness assessment, prioritize the top 3-5 issues that are killing your value:
If you have owner dependency:
- Hire or promote strong managers
- Document processes and systems
- Delegate decision-making authority
- Step back from daily operations
If you have customer concentration:
- Launch targeted new customer acquisition
- Diversify across industries or geographies
- Show 6-12 months of improving diversification
If you have messy financials:
- Hire a qualified CFO (fractional is fine)
- Clean up 3 years of financial statements
- Implement proper accounting systems
- Separate personal and business expenses
If you have weak margins:
- Analyze cost structure and identify inefficiencies
- Renegotiate vendor contracts
- Optimize pricing strategies
- Improve operational efficiency
Timeline: 6-18 months depending on complexity
Step 4: Bring in Transition ExecutiveServices (If Needed)
This is where Trusted BTA is different from most advisors.
If your business needs significant improvements—but you don't have the internal capacity or expertise to make them—we bring in the firepower to get you there:
Fractional CFO:
- Cleans up financials
- Implements systems
- Improves margins and cash flow
- Prepares business for due diligence
Fractional COO:
- Documents processes and systems
- Reduces owner dependency
- Strengthens operations
- Builds scalability
Interim CEO:
- Leads strategic initiatives
- Builds management team
- Drives growth and performance improvements
Why this matters: We've seen businesses increase their valuation by 20-40% with strategic improvements made 12-18 months before going to market. That's real money—often millions of dollars in additional sale price.
Timeline: 6-18 months, depending on scope
The Timing Dilemma: When Should YouActually Sell?
Here's the question every business owner struggles with: When is the right time to sell?
The honest answer? There's never a perfect time.
But there are better and worse times—and understanding the tradeoffs is critical.
Why Waiting for "The PerfectTime" Costs You
Business owners tell themselves:
- "I'll sell when revenue hits $X..."
- "I'll sell when I have a year of strong growth..."
- "I'll sell when the market recovers..."
- "I'll sell when I'm really ready to retire..."
The problem with waiting:
- You might not get to choose. 50% of business owners exit unexpectedly due to the "5 D's." If you wait too long, the decision might be made for you—under the worst possible circumstances.
- The market changes. The hot market today might cool of tomorrow. Interest rates rise. Economic conditions shift. What's a 7x multiple today could be a 5x multiple in 18 months.
- Your business might peak. Revenue and EBITDA don't grow forever. If you wait too long, buyers might see your best years in the rearview mirror.
- You get older. Running a business takes energy. The longer you wait, the more exhausted you become—and the more you risk burnout or health issues that force a distressed sale.
Why Going to Market Too Early AlsoCosts You
But rushing to market unprepared is equally dangerous:
- You blow confidentiality and can't take it back
- You get lowball offers that reflect your weaknesses
- You create market perception that your business is flawed (if it doesn't sell)
- You leave millions on the table by not fixing fixable issues first
The Right Timing: When PreparationMeets Opportunity
The right time to sell is when three conditions align:
- Your business is ready (strong financials, systems, management, growth story)
- The market is favorable (high demand, strong multiples, available capital)
- You're personally ready (emotionally prepared to walk away, plan for what's next)
Right now, condition #2 is in place. The market is hot. Buyers are active. Multiples are strong.
The question is: Are conditions #1 and #3 in place for you?
If yes—engage an advisor and start the process.
If no—get to work on fixing what's broken. Then sell when you're truly ready.
Current Market Conditions: Why NowMight Be a Good Time
Let's talk about what's happening in the M&A market right now—and why this might be a strong window for prepared sellers.
Private Equity Dry Powder: $2+Trillion
Private equity firms are sitting on record amounts of uninvested capital.They raised massive funds over the past few years, and they need to deploy that capital.
What this means for you: Competition for quality businesses is high. If your business is attractive, you'll have multiple interested buyers—which drives up your price.
Lower Middle-Market Activity IsGrowing
After a slower 2022-2023, lower middle market M&A activity rebounded strongly in 2024:
- 12.8% growth in deal volume
- 88% of advisors report lower middle-market deals met or exceeded broader market performance
What this means for you: Buyers are active and deals are closing. This isn't a dead market—it's a functional market for prepared sellers.
Sector-Specific Opportunities
Certain industries are particularly hot right now:
- HVAC and trades: High demand, strong multiples, strategic and financial buyers competing
- Manufacturing: Especially businesses with strong margins and diversified customers
- Healthcare services: Always in demand, demographic tailwinds
- Professional services: Recurring revenue models command premium multiples
- Distribution: Consolidation plays, economies of scale opportunities
What this means for you: If you're in one of these sectors, your window might be particularly strong.
But Markets Don't Stay Hot Forever
Interest rates, economic conditions, and investor sentiment all change.The strong market today might not be the strong market in 2026.
If you're ready—or close to ready—this is a good time to move.
The Bottom Line: Readiness BeatsTiming
Here's what we tell every business owner who asks "Should I sell now?"
The market doesn't matter if your business isn't ready.
A hot market won't save a business with owner dependency, customer concentration, and messy financials. Buyers will still lowball you—or walkaway.
But a well-prepared business can sell successfully even in a slower market—because quality always finds buyers.
So the real question isn't "Is the market good?" It's "Is my business ready?"
If your readiness score is 8-10, the answer is yes—move forward.
If your readiness score is 5-7, spend 6-12 months fixing the gaps, then move forward.
If your readiness score is 0-4, spend 12-18 months getting serious about preparation.
Don't wait for perfect. But don't rush into disaster, either.
Let's Assess Your Readiness—And BuildYour Game Plan
If you're thinking about selling, or if you're just trying to figure out where you stand, let's have a conversation.
We'll do a realistic assessment of your business:
- Where are you strong?
- Where are the gaps?
- What would it take to get you ready?
- Is now the right time, or should you prepare first?
No pressure. No obligation. Just an honest discussion about whether your business is ready to sell—and what you should do next.
📞 Call us: (330) 388-0768
🌐 Visit: www.trustedbta.com
✉️ Email: info@trustedbta.com
The market is hot. The question is: Are you ready?
Trusted Business Transaction Advisors
M&A Advisory for Established Businesses
You aren't a transaction. You're a transition.
.svg)
.svg)
