^{Originally published by MSN}

For those thinking about selling their business because they’re tired of all the pressure, risk, fires, payroll, hiring, lawsuits, AI, taxes, tariffs — to name a few — timing is about to matter more than ever.
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“Interest rates are easing, making capital more readily available,” says Paul Cheetham, founder and CEO of the boutique M&A advisory firm Vanla Group. “Demand from search funds and ETA buyers is exploding. Every year, thousands of highly educated operators graduate from programs like HBS, Wharton, Kellogg, Stanford, with one goal: to buy a small business.”

According to Cheetham, the combination of these factors suggests that business valuations are on the rise. “If you want to capture this surge without making a mistake, you need to prepare now,” he says.

Here’s what most business owners get wrong:

1) The truth about business valuations: It’s not just about math, it’s about psychology

“Let me be clear: there is no magic formula for valuing a business,” Cheetham says. “It’s only worth what someone is willing to pay, and the terms of that payment. The buyer is looking at your historical financials to determine the cash flow and the risk involved in generating it. There is an expression used in negotiation: you can set the price, but I’ll set the terms. The terms of the deal can make or break it.”

Cheetham explains that, when one markets their company for sale, they need to tell the buyer why their business is better than the next one.

“What is the reason why they should believe your company is going to skyrocket? That narrative needs to be believable and supported,” says Cheetham. “Remember, owning a business is risky; you need to carefully articulate why your business is less dangerous than your competitors' to justify your price and terms.”

2) A buyer isn’t a buyer just because they say they are

According to Cheetham, a genuine buyer has either purchased a company before or has had full P&L responsibility for a business. They understand what it takes to make tough decisions to drive the right outcome.

Conversely, a bad buyer behaves like a teenager looking at a sports car. They see the shiny exterior, the speed, the potential freedom, the ability to impress their friends, but they put little thought (if any) into what it actually takes to own it.

Cheetham says that some early red flags every seller should watch for include:

●     Low enthusiasm for meetings or deadlines.

●     Buyers who think they know everything, rather than being humble and asking questions.

●     Buyers who are trying to buy more than one company at once. “Buying a business is complex,” Cheetham says. “You wouldn’t trust a brain surgeon to operate on someone else at the same time they’re performing your procedure.”

●     No clear vision for the transition post-close.

●     No references and no operating experience.

●     Overconfidence in their ability to finance the deal.

According to Cheetham, these are the “tire kickers” who will burn 60-90 days of a business owner’s life and never close, forcing them to restart the clock each time.

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3) Deals don’t die at LOI; they die in due diligence

“The letter of intent (LOI) stage is typically where business owners have the strongest position,” Cheetham explains. “The due diligence phase is where the power shifts, and experienced deal makers know precisely where the bodies are buried. Once a buyer starts reviewing contracts, tax exposure, payroll structure, and true profitability, the real business is revealed.”
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Cheetham says that some of the many issues that can delay or halt deals can include:

●     Buried liabilities in customer contracts.

●     Phantom profit (owner running personal life through the business).

●     Contracts that legally can’t be assigned to a new owner.

●     Multi-state tax exposure that was never remitted.

●     High-key employee risk (“pay me more or I’m out”).

“Deal killers only come to light when someone who knows what they’re doing digs in,” Cheetham adds.

4) The winners of the 2026 surge will be the sellers who prepare early

According to Cheetham, the biggest mistake owners make is thinking, “When we’re ready to sell, we’ll start getting ready.” In reality, however, the process doesn’t work like that.

“Sophisticated buyers are trained,” Cheetham notes. “They’re disciplined. And they will exploit every weakness in your prep.”

For those who want to exit at a premium in 2026, Cheetham advises the following:

●     Start cleanup 6-12 months before going to market.

●     Normalize your books and match them to your tax returns.

●     Fix contract issues.

●     Lock down key employee agreements.

●     Calculate real tax impact before setting your target price.

“The earlier you start, the cleaner the story and the better the outcome,” Cheetham says.

Final thoughts

“If you want to capture this opportunity and not get left holding the bag, don’t go into the sale thinking it’s just about valuation,” Cheetham explains. “The person buying your business is looking at the risk-adjusted potential for future cash flow. The more time you spend de-risking your business, the stronger your negotiating position will be throughout the entire process.”

Cheetham stresses that deals close because there is trust, and trust is built through transparency. “Going through diligence yourself before trying to sell your business will ensure a smooth close and the highest possible price and best terms,” he concludes.

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^{Originally published by MSN}