7 Mistakes Salt Lake City Business Owners Make When Selling

Most owners walk into a sale with a number in their head: the number they need to retire, the number a neighbor sold for. None of those are valuations. They are wishes.

Real valuation starts with normalized EBITDA, then applies a multiple. For most Salt Lake City small businesses in the $500K to $25M revenue range, that multiple lands between 2.5x and 5x. If you don’t know your normalized EBITDA before you go to market, the buyer will calculate it for you, and they will not be generous.

2.5x – 5x is where most $500K – $25M businesses land.

Tax returns minimize taxable income. Due diligence packages maximize provable earnings. These are different documents prepared with opposite goals.

Buyers expect GAAP-style monthly P&Ls going back 36 months, a customer concentration analysis, clean separation between business and personal expenses. Most Salt Lake City small businesses don’t have these on day one of the process. The work takes 3 to 6 months if you start before going to market. It takes much longer and erodes your negotiating position if you start once a buyer is at the table.

3 – 6 months of prep, started before you go to market.

Buyers are not buying your business. They are buying the cash flows your business will produce after you leave. If those cash flows depend on you personally (your customer relationships, operational knowledge, decision-making), the buyer is buying a job, not an asset.

When the answer to “who owns the top customer relationships” is the owner, the multiple drops by a full turn or more. Reducing owner-dependence takes time. Owners who plan their exit 18 to 36 months out can materially change their multiple. Owners deciding in month one cannot.

A full turn of multiple. That’s the cost of being the business.

A maximum-value exit sits at the intersection of three plans: your personal plan (what you do next), your business financial plan (how the company is positioned), and your personal financial plan (what you need post-close to fund the life you want).

Owners who optimize one and ignore the other two leave money or peace of mind on the table. The business sells but you have no idea what to do on Monday. The price is right but the after-tax proceeds don’t fund retirement. The business gets cleaned up but no one asks what you actually want from the next chapter. All three matter.

The first buyer who approaches you is rarely your best buyer. They are simply the most aggressive one, and their willingness to pay top of market depends almost entirely on whether they think other buyers are competing.

A real process means engaging an advisor, identifying 30 to 100 qualified buyers, and creating a structured timeline. The premium from running a process is typically 15% to 40% above what you would have accepted from the first buyer. For a Salt Lake City business worth $5M, that is $750K to $2M of additional value, which more than covers any advisor fee.

15 – 40 % premium. That’s what running a process pays.

Seller financing, where you accept a note for part of the purchase price paid out over time, is common in small business sales. It can be a useful tool. It can also turn a sale into a multi-year exposure to a buyer’s mistakes.

What collateral secures the note? Are personal guarantees real or theatrical? In what order do you get paid relative to bank debt the buyer takes on at close? Owners who do seller financing without a transaction attorney and a tax-aware CPA are accepting risk they have not modeled.

Most Salt Lake City small business sales take 12 to 18 months from the decision to sell to the wire transfer at close. That includes preparation, going to market, and signed-LOI through close.

Owners often plan their next chapter on a much shorter timeline. Then due diligence takes longer than expected, financing falls through, working capital negotiations drag. The fix is not finding a faster process. The fix is planning your life around the realistic timeline. Owners with 18 to 24 months of runway make better decisions throughout. Owners on a hard deadline negotiate from weakness.

12 – 18 months. That’s the realistic close window.