What Percentage of Businesses Sell?

Jacob Orosz Portrait
by Jacob Orosz (President of Morgan & Westfield)

Executive Summary

Information on Success Rates is Unreliable

There is a dearth of reliable information when it comes to the success rates of business sales. Most data comes directly from brokers and M&A advisors, so there’s a significant amount of bias and ambiguity at play.

Success Rates are Subjective

Success rates are also complicated by dozens of “fuzzy” situations in which the transaction could be considered successful in one light but unsuccessful in another. For example, if a seller puts their business on hold, or withdraws it from the market because revenue recently declined and they aren’t willing to reduce their expectations, does that go down as unsuccessful? Or should this deal be excluded from the data entirely?

Our Estimate

  • Small Businesses – We estimate the success rate for small businesses to be in the range of 15% to 30%.
  • Mid-Sized Businesses – We estimate the success rate for mid-sized businesses to be in the range of 30% to 70%.


What percentage of businesses actually sell? You’ve doubtless seen multiple claims by brokers, M&A advisors, and investment bankers, but what’s the real number?

In this article, we discover just how hard it is to arrive at clear, unambiguous data on this subject. In the sensitive world of M&A, no broker wishes to absorb such results as outright failures, and statistics get fuzzier still when the reasons for no sale are ambiguous or cumulative. 

That said, with an incisive eye on the sources, we believe there is reliable information that puts your own chances of a deal in perspective. 

Sources of M&A Information

When attempting to determine what percentage of businesses actually sell, you should ask yourself two important questions:

Which sources provide success rates?

The primary source of information regarding the percentage of businesses that sell are the brokers and advisors themselves. Naturally, this information is always biased towards the positive, and few are willing to report their success rates if they’re on the low side.

The common sense test: does your M&A advisor’s success rate hold up to scrutiny?

It’s wise to take statistical boasts with a pinch of salt. We’re aware of one well-known firm that makes public claims regarding their success rates, but ten minutes of simple math reveals that the numbers don’t add up.

How are success rates calculated?

Consider how you would handle the following scenarios. Would you count these as successful or unsuccessful cases, or neither? Would you include these in the data or exclude them?

  • The seller takes the business off the market and puts the sale on hold due to a change of heart.
    • This is extremely common – it happens in about 10% to 25% of cases. Owners withdraw their business from the market if the traction is slow, if they get cold feet, or if problems arise during the sale that they need to address.
  • The seller dies in the middle of the transaction.
    • Sadly, this also happens. When it does, how do you record the result? What if the business passes to the next-of-kin and they decide not to sell?
  • The seller withdraws their business from the market and “sells” it to the employees for nothing down.
    • If the seller can’t receive an optimal price for the business, they may choose alternate routes that yield a less-than-favorable price.
  • A full-price offer is received but the seller’s partner refuses to sell for personal reasons.
    • This is another common scenario. An LOI is received for more than the business is worth, but the seller’s partner drags their feet and vetoes the deal. Were we successful?
  • The seller withdraws their business from the market because revenue declines.
    • Most sellers prefer to wait and ramp up their revenue so they can optimize the price. Were we unsuccessful if the seller put the process on hold?
  • The seller receives an offer for the appraised value of the business but refuses to sell because they just landed a large contract with a new customer and want to see it play out.
    • The reverse also happens. Sometimes the business is doing so well that we receive a full-price offer, and the owner doesn’t accept it. Or, we have a full-price, all-cash offer on a business and the owner rejects it and increases their asking price. 
  • The seller “sells” their business to a family member for no money down.
    • It was against our advice but it’s still a sale. Do we count it as a success or a failure?

There are dozens of scenarios we encounter that could either be placed in the successful or unsuccessful column, or perhaps neither. How do you handle these scenarios?

Make sure your M&A advisor can “show their working” – when was the last time they updated their success rates?

Evidence & Objectivity

The answer is, it’s entirely subjective and dependent on who’s asking. The important thing is, can your prospective M&A advisor demonstrate sufficient evidence of their success rates? Within the bounds of confidentiality, are they generous with their information and forthcoming about their M&A experiences?

As a seller looking for accurate statistics, your best approach is to try to force objectivity into those subjective numbers. You can do this by asking your advisor the following questions:

  • How long is their time frame for completing a sale and calling it successful?
  • What’s their approach to cataloging successful and unsuccessful deals?
  • When was the last time they updated the success rates on their website? 
  • Will they show you their own performance metrics and spreadsheet data?
  • Can they show you their success rates for previous years, or is the figure mysteriously static?
  • How would they handle the scenarios listed above?

A Lack of Accurate Information

The bottom line is that there’s a dearth of reliable statistics when it comes to the percentage of businesses that actually sell. After all, the M&A world is small and no firm wants to be known for a low success rate.

Perhaps the best sources of information are anonymous surveys sent to brokers and M&A advisors, although anonymity can’t be fully guaranteed and this will surely influence the results. 

Business Sales: Our Estimate

Small Businesses

We estimate the success rate for small businesses to be in the range of 15% to 30%.

Success rates primarily depend on the quality of the business and the preparedness of the seller. The more attractive the business is, the more likely it will sell. Likewise, the more prepared and realistic the seller, the higher the chance they’ll sell their business.

Mid-Sized Businesses

We estimate the success rate for mid-sized businesses to be in the range of 30% to 70%.

Larger businesses with greater than $3 to $5 million in EBITDA tend to have higher success rates, while smaller businesses tend to have lower success rates.

The same principle applies here as to smaller businesses – the more prepared the business and the seller, the higher the chances the company will sell.


Sad to say, many businesses fail to sell. It may be due to recession, the loss of a significant customer, an industry downturn, or the actions of a third party that’s out of the seller’s hands. 

So, when reviewing your advisor’s success rates, treat them with an open mind and a critical eye. Push them to “show their workings” and unpack the math behind the marketing.

Then you can proceed to the next step with confidence in your broker and sober expectations for sale.