Selling a business is a major milestone for any owner, but the process is often surrounded by misconceptions that can lead to poor decisions, stalled negotiations, or failed deals. Whether you’re selling a small business or navigating a more complex M&A transaction, understanding the truth behind these myths is essential for achieving a successful outcome.

Below are five of the most common misconceptions owners encounter and how to avoid them.

Misconception #1: “Once the LOI is signed, negotiations are over.”

Many sellers breathe a sigh of relief once the Letter of Intent (LOI) is signed, believing the deal is nearly finalized. Unfortunately, this assumption can create significant problems.

The Truth: The LOI marks the beginning of deeper negotiations—not the end.

While the LOI outlines the buyer’s initial terms and intentions, it is typically non-binding and contingent on due diligence. After the LOI is signed, buyers will:

• Review financial statements in detail

• Inspect contracts, leases, and employment agreements

• Identify potential liabilities

• Evaluate operational risks

• Verify revenue and customer diversification

• Request additional documentation

If issues surface during due diligence, buyers may renegotiate price, change deal structures, or walk away entirely. Sellers who assume the LOI “locks in” the deal often become complacent, slowing down responsiveness or failing to maintain performance—both of which can jeopardize the transaction.

How to avoid this misconception:

Remain proactive, responsive, and transparent throughout the due diligence process. Work closely with your broker and advisors to prepare for follow-up questions and ensure the business continues to run smoothly.

Misconception #2: “Buyers never assume the seller’s debt.”

Many owners believe that selling a business allows them to walk away completely free of all liabilities. While that outcome is ideal, it is not always realistic.

The Truth: Buyers frequently assume some liabilities—or adjust the purchase price to account for them.

In many transactions, buyers will evaluate:

• Existing loans

• Equipment leases

• Contractual obligations

• Accounts payable

• Tax liabilities

• Pending legal issues

Even if the buyer does not directly assume the debt, they will factor these obligations into the valuation. Debt affects cash flow and future risk, so a highly leveraged business will almost always be priced differently.

How to avoid this misconception:

Before listing your business, review your liabilities with a broker or accountant. Understanding what a buyer may assume—or discount—helps you price the business correctly and prevents surprises during negotiations.

Misconception #3: “All offers are backed by financing.”

Receiving an offer can be exciting, but not all offers are equal. Some buyers submit LOIs or proposals before confirming whether they can afford the business.

The Truth: Many buyers express interest before securing financing—and some never qualify.

A buyer may:

• Overestimate their financial capacity

• Rely on uncertain bank approval

• Expect seller financing

• Be “testing the waters” without commitment

If the buyer is not financially capable, the deal will inevitably collapse—often after wasting weeks or months of valuable time.

How to avoid this misconception:

Your business broker should thoroughly vet every potential buyer before sharing sensitive information or accepting offers. This includes confirming financial capacity, liquidity, industry experience, and overall seriousness.

Qualified buyers reduce risk and speed up the sale.

Misconception #4: “You can sell your business without a professional team.”

Business owners are used to solving problems independently. That confidence sometimes leads them to believe they can manage a business sale on their own.

The Truth: Selling independently increases risk—and usually decreases the sale price

Selling a business requires expertise in:

• Valuation

• Confidential marketing

• Negotiation strategy

• Legal structuring

• Financial analysis

• Buyer screening

• Due diligence management

Mistakes can lead to underpricing the business, accepting weak offers, breaching confidentiality, or—even worse—losing qualified buyers because the process feels disorganized or unprofessional.

Why you need a team:

• A business broker markets the business confidentially, screens buyers, and negotiates on your behalf.

• An M&A attorney ensures deal terms protect your interests and comply with legal requirements.

• An accountant prepares financials and supports due diligence.

With the right team, the sale moves faster, smoother, and with fewer risks. Without one, sellers often leave money on the table—or fail to sell at all.

Misconception #5: “You must sell the entire business.”

Many owners assume that selling means giving up 100% ownership and walking away completely. While full exits are common, they are not the only option.

The Truth: Partial sales and minority ownership deals are increasingly common.

Depending on the situation, owners may choose to sell:

• A controlling majority

• A minority stake

• A percentage with phased transitions

• Equity to partners, investors, or employees

Selling part of the business allows owners to:

• Retain income streams

• Remain involved in strategic decisions

• Gradually transition into retirement

• Benefit from future growth under new leadership

For some, a partial exit maximizes long-term benefit while reducing daily operational responsibilities.

How to avoid this misconception:

Discuss exit options with your broker before deciding on a full sale. You may find that a phased or partial transition aligns better with your financial and lifestyle goals.

Knowledge Prevents Costly Mistakes

Misunderstanding the M&A process can lead to undervaluation, stalled deals, or preventable risks. By recognizing these five common misconceptions—and working with experienced professionals—you set yourself up for a stronger, smoother, and more profitable transaction.

Whether you’re planning to sell next year or simply exploring your options, the best decisions come from accurate information and expert guidance.