Why Most Business Owners Exit for Less (and How to Beat It)
Updated on September 4, 2025
Transcript
Have you ever wondered why 85% of online business owners walk away a bit disappointed with what they actually exited their business for? Well, I just analyzed 84 real businesses that we sold on the Empire Flippers Marketplace, and I have some interesting data to share with you about why that happens and how you, as a seller, can avoid that outcome. This way, you can walk away with an exit that's amazing—something that you're really, really excited about, and honestly, might change your life. Like, we just got a guy to get a six and a half million dollar deal. That's going to change his life in very big ways, right? So, stay tuned if you want to make sure you exit your business at or above what the rest of the market does. This is a very important video for you.
I'm going to cover why most sellers are making a pretty crucial and critical mistake that ends up costing them tens of thousands of dollars. In the next few moments, you're going to learn the exact percentage discount that sellers end up selling for—which is 85.7% of the businesses we sell—and the three pricing mistakes that cost these sellers over $47,000 on average. Meanwhile, a simple strategy I’m going to reveal can help you be like the 2.4% of our sellers who actually sold above their asking price—above the list price. As you can probably guess by that statistic, that's pretty rare.
But before I get into that, I need to tell you a brutal truth. I often joke that part of my job as a marketer, business consultant, and business broker is that I’m here to break your dream. I’m here to break your dreams of what you're going to sell for so you will actually wake up—and have the opportunity to become rich. What I mean by that is, the average online business that we sell—based on this recent data at least—is selling for a discount from their listing price of roughly 21.4%. Now, most brokers are not going to tell you that, right? No one says, "List with me and I will promise to sell you for less than 21% of what we list you at." Most brokers won’t tell you that upfront because they want you locked into an exclusive agreement with them, where they can then whittle you down over, say, six months—which is the typical time for most exclusivity.
By the way, our exclusivity at Empire Flippers is only about two months, so it’s much, much shorter than all those other people. But most brokers want to lock you into exclusivity. So, once you are in, then they can introduce you to reality. They'll let you list at what you want—of course you're worth that much, Mr. and Mrs. Seller—and then once you’re locked in, they say, "By the way, you're actually worth this much." So, if you want to sell in the six months (because you can't go anywhere else), you better wise up to reality, right? That's what most brokers are trying to do. I’m telling you the truth: Most businesses sell for a 21% discount or so, because that’s what we do at Empire Flippers—we believe in transparency. You’re going to figure this out anyway, one way or another, so we want to make sure you know.
Now, let’s talk about why that happens. If you sell at this discount—let’s say you had a $300,000 business—you’re likely to walk away with just $235,000. Still a good chunk of change, of course, but less than what you were hoping for. However, our marketplace data reveals some insights that can help you overcome this discount. Because remember, some of our sellers either sold at list price or sold above list price, right? So how do they do that?
What you’ve got to realize is that the reality of M&A is different than seller expectations. If you’re looking to sell a business, these are often two very different worlds that are in massive conflict with each other. What you think your business is worth often differs greatly from what it actually is worth. And this is the expectation gap that we have to overcome. That’s part of what our team does every day—helping sellers overcome this expectation gap. Honestly, it’s rampant, and it’s one of the hardest parts of our job: showing the seller the actual truth. We’ve sold over 2,400 businesses. We see a lot of businesses. We have a lot of data.
But most sellers make this mistake because they’re pricing their business on what they think it’s worth—and by "think," I really mean what they feel it’s worth—rather than on actual justification for why they think that. Or they’re operating on outdated information. For example, we have a lot of sellers who come to us expecting prices like those in 2021 and 2022, when there was a massive asset bubble for alternative assets: private equity, family offices—everyone was raising hundreds of millions of dollars to fight over these businesses. That’s a very different landscape than we are in today, where the M&A market is a lot softer, buyers are a lot more hesitant, and buyers need a lot more justification as to why your business is valued that much. So this outdated information can hurt your chances to become a millionaire, basically, because you’re pricing it on bad info.
The other thing, which is kind of related to the first, is emotional attachment. And if you’ve been following this channel at all for any length of time (and if you’re not subscribed, please help out my KPIs, subscribe, and leave a comment—thank you!), you know what I’m about to say. This emotional attachment is what I call emotional equity. Your business has done amazing things for you—maybe it allowed you to quit your job, stay home with your family, travel the world, all sorts of cool stuff that makes you emotionally value your business. But here’s the thing: Buyers do not care. Buyers do not care that you were able to travel the world due to this business. They’re not giving you a premium valuation for that. They’re looking at cold, hard market data. And if you want to make sure you don’t get this discount, you also need to look at this market reality and really internalize it.
So let’s talk about how we can wake you up, bring you into reality, so you can become a millionaire with a truly realistic exit in mind. Here are some actual numbers I’ll repeat: 85.7% of our sellers sell below asking price. That’s not terribly uncommon, as you can tell by the number. But 11.9%—just under 12%—sell at asking price. And only 2.4% of our sellers sell above asking price. Those 2.4% who sold above asking averaged a 4.4% premium above what they were listed at. So, on a $1 million business, that’s an extra $44,400 in your pocket, which—hey—not bad if you can get that.
So the question becomes: How can I possibly sell above market price? How can I be like these 2.4% superstars? My business is a superstar, so what do I do? Tell me, Greg! All right, you got it. I will tell you.
This is the premium positioning strategy you need to internalize when it comes to selling your business. That’s partly about how you are talking to the buyer, but also about understanding the realities of the market—not the emotional attachment most sellers have with their own business. Businesses that command premium prices tend to share roughly three characteristics. Of course, there are more, but we’re simplifying here.
The first characteristic is that they’re positioned in the premium segment in the first place. Our data shows businesses valued at over $1 million sell roughly 60% faster—about 46 days versus 106 days, which is our broad marketplace average of days on market. This is because serious buyers recognize quality immediately. So the core concept is: Do you have a truly quality business, if you’re looking at it with no emotion, and role-playing as the buyer? Is your business something that’s really, really good?
To give you an example, a lot of my buddies who run marketing agencies are under the false impression that they can’t sell their agencies for anything, which is completely untrue. In fact, we at Empire Flippers—we recently sold a six and a half million dollar marketing agency that we got under contract at full list price. So, one of the 12%, and within 30 days—beating out the average of the million-dollar listings as well by about 16 days. Buyers crave a high-quality business and will make you absolutely rich if you can show them and prove to them that you have a high-quality business, which brings us to justification and a little bit of psychology.
That brings us to characteristic number two. These sellers we see selling above or at list price tend to already understand—or they have really good help from, say, qualified brokers like us who help them understand—buyer psychology. They want to be fielding multiple, real offers on their business, rather than honing in on just a single offer from a single buyer. Now, multiple offers create what us M&A guys call "a market," and a market creates better outcomes for you—better sales prices. All these buyers are competing.
To give you some data on this: The average listing on Empire Flippers gets about 81 interested buyers signing an NDA. Now, in order for those buyers to sign that NDA, they have to prove to us—before they ever talk to you—that they have the money to acquire this business. If the seller likes their offer, they have to provide financial proof. We have them verify their liquidity—it’s something that buyers hate about us, to be honest, but it’s great for you as a seller. So that means, on average, there are going to be 81 people who have proven to us that yes, they have the ability to buy this business. They have the financials to back it. Those 81 people are all fighting over one business: you. And if you’re a high-quality business, they’re really fighting for you.
This is something we do all the time at Empire Flippers. Part of why we take our commission from the seller—not the buyer—is because our goal is to sell you for the highest possible price. We want our buyers to create bidding wars so you get the maximum amount of money for exiting your business. Now, when I say "maximum amount of money," I don’t mean to my sellers' dislike that we want buyers to way overpay on something. That’s not something we’re into either. We want our buyers and sellers to both win. We want a really good, reasonable exit price for our sellers that makes them ideally rich, and that price still being within logical reality for the buyer, so they also get a good deal. We want them to make money too—it's not uncommon for buyers to come back and sell what they bought from us, right? So everyone wants to win. We believe in the win-win-win—you win, the buyer wins, and we win because we get a commission. Hopefully, the buyer comes back and flips that business with us later after they’ve grown it.
Because of all this, this is just one of many reasons people are willing to pay us anywhere between 7 and 15% commission on helping to sell their deal. Even though a lot of sellers scoff—like, "Oh my god, 7 to 15%"—even though those are pretty common broker averages, we get them far more money than they would have gotten on their own, and that includes factoring in our commission. I’ve seen this happen many, many times, where my friends say, "Oh, sorry Greg, I didn’t use Empire Flippers; I didn’t want to pay your commission, so I sold it privately." And I’ll ask, "Hey, no worries, what’d you get?" Often—probably nine times out of ten—the money they got is way less than what I believe we could have gotten for them, and they would have made way more money, even after our commission. In fact, in one case, they would have paid us a higher percentage commission than they initially thought, and still would have walked away with more money.
So, I mean, which would you rather have: pay us a commission and walk away with more money in your pocket, or save on the commission fee and walk away with less money? To me, it's a logical choice, but I understand why it puts some people off.
So there we have two characteristics: a premium business that is justified for its exceptionality, and creating a buyer feeding frenzy of everyone competing over your deal. We can only create that feeding frenzy if there truly is something exceptional and really premium about your business. That’s the core of everything.
But the third characteristic is pricing strategically, not emotionally. These premium sellers tend to analyze comparable sales and prices for their negotiations with their buyers. They're going to be anchoring that price on the higher end, while also building in some flexibility—which is something we coach our sellers on—to always have that breathing room, depending on where the buyer is going. We want the ability to create a deal structure that actually gets done, not a fantasy deal structure that a lot of sellers hope for, like 100% cash upfront (which is almost impossible if you’re valued above $200,000; not impossible, but almost impossible).
We want to know what other businesses like yours have actually sold at, rather than the seller just saying, "My business should be worth 4x," which, for most SMBs, is at the tippity top of valuation multiples. Most SMBs are valued between 1 to 4x, which a lot of entrepreneurs don’t like to hear, but it’s true, unfortunately. These sellers are not just pricing themselves at 4x because they "deserve the best," with no rhyme or reason as to why. These sellers are also justifying why their business should be at that tippity top. What makes their business so exceptional that they can sell at an exceptional multiple? It’s not just exceptional in their head—we need to make sure the buyer understands why the business is exceptional.
That’s another thing brokers like us can help you with. We’re outsiders looking in at your business, and we've sold over 2,400 businesses. So, if anyone knows whether your business is truly exceptional compared to others like it, it’s us. We can help you come up with that game plan of how to justify your multiple, what kind of flexibility you need to have, and how your exceptional multiple compares to industry benchmarks of real deals that have sold.
Here’s a shocking stat: 42.9% of listings receive what I would consider very high buyer interest—that’s between 51 to 100 potential buyers. But even though most of these listings are getting high buyer interest from qualified buyers (who have proven their liquidity and ability to pay for the business), most of these businesses are not getting the exit price they were hoping for. The demand exists, but most sellers are not capturing that demand. The big reason why—and what we’ve been talking about this whole video—is that the seller is not justifying those prices to buyers in such a way that the buyer realizes, "Hey, yeah, this is, in fact, an exceptional acquisition," or at least they're not doing it in the right way. A big part of that is understanding your positioning framework.
So let’s talk about how you actually do this—how you position your business in this more premium style.
**Step one: Market research before pricing.**
Don’t guess your value. Our data shows $250,000–$500,000 valued businesses sell for roughly 26x of their monthly profit, while businesses valued at under $50,000 get about 19.4x—significantly lower. The bigger your business, in general, the better multiple trends are going to be. If you don’t know how to do this, no worries. The easiest thing for you to do is simply reach out to our team at Empire Flippers. It’s absolutely free, and pretty fast—typically a week to four weeks, depending on the complexity of your business. Pretty much no one in our industry has as much market data as us.
Even if you don’t submit your business for vetting, you can just reach out to us—like, "Hey, I have this business in this niche, this business model. What are your average multiples?" That’s pretty easy for us to get for you. The important thing here is, we don’t just look at listing price. Anyone could list at any price. On many marketplaces, sellers can set any price they want, but listing prices are kind of useless. What truly matters is what these listings are actually selling for. I don’t personally know any broker that has more data on the actual sales price than us; we own our data end to end. Every listing, every deal structure that gets done on Empire Flippers—we know what’s happening. So, you can just ask us for the real market data. That’s very important, because there are a lot of DIY marketplaces (and, like, we have one now too with Money Nomad) where sellers can just list at whatever price they want. But listing price doesn’t matter—sales price is what matters.
**Step two: Optimize your financials.**
Most entrepreneurs, when they come to us, their books are a mess. You want clean books. These are not nice-to-haves—they’re absolutely essential if you want to sell for a good or exceptional multiple. Premium buyers will pay a premium price for businesses they understand quickly. If your financials are all over the place, expect buyer hesitancy. If it’s not clear to them, that creates less trust—even when you do get them what they need. Less trust means you are going to get a worse deal, and it will take longer to complete. So, basically, the exact opposite of what you want.
If you don’t know how to do financials—and in my experience, most entrepreneurs don’t—just hire a bookkeeper, hire an accountant to help you with this. If you want us to do it, we’ll do it for you for free; we create your P&L as part of our vetting process. So, if you’re looking to sell and you want to get your books clean, no worries—come to us, and we’ll take care of it for you at no extra charge.
**Step three: Create a competitive position.**
Here, you’re going to highlight both unique advantages and your failures. It’s very important to also highlight failures—I’ll get into why. Many sellers want to say, “Look at me, my business is absolutely perfect!” No one wants to admit failure. But hiding these mistakes ironically hurts your ability to sell at a premium price, because every failure represents an opportunity for the buyer. If you absolutely sucked at Facebook ads and lost $100,000 this year on Facebook ads—if you couldn’t get them to convert—admitting that to the buyer, with your numbers backing it up (that you didn’t know exactly what you were doing), suddenly becomes an absolute gold mine in the mind of a buyer who is a seasoned hand at Facebook ads. They’re probably seeing a dozen things you messed up—newbie mistakes. You were a newbie at Facebook ads, but they’re not, so your mistakes are often the buyer’s opportunity.
One thing we always say at Empire Flippers: You should never sell your business based on potential. If I tell you, “Hey, I have a great business; this is going to be the next billion dollar idea,” the buyer—in this case, you—will say, “Great, I’ll give you a billion dollars when we reach that valuation. I’ll pay you $1,000 a month.” They’re going to way lowball you. “Oh, this business is so great? If you believe in it, you wouldn’t mind taking a big seller finance or a big earn-out payment to minimize my capital so we can grow it quicker together, right?” You don’t want to do this if you want to get as much money upfront as possible.
So, instead of selling on potential—like, “look how great my business is”—instead, sell on the mistakes. Look at all these mistakes I made, because that builds the potential in the buyer’s mind without you selling on potential. That’s a very important part of making sure you have the correct positioning: justifying both why you’re exceptional and where the opportunity is for the buyer. We want buyers salivating a bit—we want them to come to the conclusion on their own that the business is exceptional.
How do we do that? One, we find out what is actually exceptional about your business, but we also talk about the mistakes. Now, like I said, sellers can get uncomfortable talking about these mistakes for obvious reasons. But if you’re dealing with a good buyer who is confident and can give you a good price, they’re going to find out about these mistakes anyway—during their due diligence, right? Typically, that’s what causes most of the red flags in a business transaction, where the buyer finds something during DD that should have been talked about by you. Now, they're wondering, “Well, if they’re not talking about this, what else are they not talking about that I'm not seeing?” You see how this creates a vicious cycle for you—all the more reason to talk about your mistakes as well as the unique things that make the business exceptional.
All right, so wrapping it all up here: If you’re considering selling in the next 12 months, don’t make these mistakes. First, make sure you analyze recent comparable sales—not list price, but actual sales price. Second, start optimizing now. Even if you’re not ready to sell right now—maybe you’re thinking about selling in 12 or 24 months from now—that’s okay, but you need to start optimizing now. Premium businesses that sell for a premium price do not become premium overnight. It takes time. So use those 12 to 24 months to make your business premium.
I highly recommend you don’t go it alone. Most sellers have never sold a business, and those that have may have sold three or five businesses. I’ve talked to sellers who have sold three to five businesses and think they’re massive experts on this, but we’ve sold over 2,400 businesses. Don’t go it alone, and don’t think you know so much that you can’t use help. You can literally reach out to us—our M&A advisors will give you a free exit plan once we know more about your business, and we can help you create that plan to make sure you get the multiple you actually want. If you have 12 to 24 months, that's plenty of time to really revolutionize your business from an average business to an exceptional business.
The third point as we wrap up is understanding that the 21% discount rate from listing price is an average discount price. We’re talking about all businesses of all quality levels on the Empire Flippers Marketplace. That’s okay, because that’s average. What we need to do is focus on being above average. Average businesses will sell for average multiples, and exceptional businesses will sell for exceptional multiples.
For the absolute best game plan, what I recommend is to get a premium valuation. If that's something you want, click the link below and submit your business for sale today. There is no obligation to sell it right away, but our team of vetting advisors will dig through your entire business, and you’ll get a professional valuation within two to four weeks. Like I said, zero obligation to sell with us if you don’t like the valuation, but whether you like it or not, you’re going to know exactly what you need to do over the next 12 to 24 months to turn your business from an average sale-price business to one of those 2.4% exceptional businesses that sell above listing prices, with buyers knocking each other out trying to give you life-changing amounts of money. Which—hey—that's a pretty good feeling. If you want that feeling, make sure you click the links down below in the description, and our team will be happy to help you get there.
