When business owners start thinking about selling their company, they tend to make their first decisions based on instincts that seem reasonable but, in practice, limit the outcome of the deal. These beliefs come up again and again in the Spanish mid-market and, while they aren't absurd, they don't reflect how M&A processes actually work.
These preconceptions can lead a seller to rule out buyers who would be a good fit, start the process too late, negotiate from a weaker position than they should, or get an unpleasant surprise with the payment structure. In every case, the result is the same: value left on the table.
Here are the five most common myths we see in SME sale processes — and the reality behind each one.
“My business isn't big enough to attract buyers”
This is the belief that holds back lower mid-market business owners the most. The logic seems solid: if I generate €2 million or €3 million in revenue, who's going to be interested in buying my business?
The answer: more buyer profiles than you think. Private equity funds that pursue buy-and-build strategies actively look for small companies to integrate as complementary acquisitions (what M&A calls an add-on or tuck-in). In these cases, the fund already has a larger platform in the sector and needs smaller SMEs to gain market share, diversify its customer base, or expand its geographic reach. For that buyer, your €2 million business isn't “small” — it's exactly what they're looking for.
Find a buyer for your business
But funds aren't the only ones looking at small SMEs. Family offices, search funds, strategic buyers looking to expand, and individual business owners seeking a first acquisition also operate in that range. What makes a business attractive to a buyer isn't its absolute size, but its fundamentals: recurring revenue, the quality of the management team, defensible margins, and growth potential. A €3 million business with a 20% EBITDA margin, a self-sufficient team, and a diversified customer base is more attractive than a €15 million one with total founder dependency and two customers accounting for most of its revenue.
If you want to understand which investor profiles operate in each size range, we've published a guide to the different types of investors in M&A.
“When I'm ready, I'll just sell to a competitor”
It's a natural idea: if anyone knows the business well and could take advantage of the synergies, it has to be a competitor. And it's partly true — strategic buyers in the same sector understand your business faster and can capture operational synergies.
But limiting yourself to selling to a competitor creates two serious problems.
The first is negotiating power. If the buyer knows they're your only option, or that you're only talking to other competitors in the same sector, your room to negotiate price and terms shrinks considerably. A competitive sale process — with buyers of different profiles evaluating the deal in parallel — creates market tension that pushes the price up and improves the terms.
The second is confidentiality risk. A competitor that gains access to your commercial information during an M&A process — customers, margins, cost structure, pipeline — obtains competitive intelligence it can use to its advantage if the deal doesn't close. Contractual protections (non-solicitation clauses, use restrictions in the NDA) help, but they don't eliminate the risk entirely.
The recommended practice is to open the process to a diverse group of buyers: strategic buyers from adjacent sectors, PE funds with an investment thesis in your vertical, family offices, and search funds. Each profile values the business differently — and that range of valuations is what allows the seller to choose the best combination of price, structure, and terms.
“I know my business, so I can handle the sale on my own”
It's understandable that business owners who have spent years building their company think no one knows it better than they do and, therefore, no one can sell it better. But selling a business isn't the same as running one, and the skills that make someone a good business owner aren't the same ones that make a good M&A negotiator.
A professional sale process requires preparing the financial and legal documentation, building an information memorandum that tells the company's story in a compelling way, identifying and contacting qualified buyers, managing a competitive process with multiple interested parties, negotiating price and structure, and overseeing due diligence without the business suffering during the months the deal takes.
That's the real operational problem: while the owner devotes time and attention to managing the sale, the business keeps running — and it needs its leader. If performance drops during the process because the founder is distracted by the deal, the buyer spots it in that period's numbers and lowers the price. It's a recurring paradox: the more involved the seller is in managing the process, the more likely the business is to deteriorate and the valuation to fall.
Our recommendation is to stay focused on running the business and hand over the management of the process to a professional. If you're not sure what kind of advisor is right for your deal, we've published a practical guide on how to choose an M&A advisor.
“I'll receive 100% of the price at closing”
This belief probably causes the most frustration during negotiations, precisely because sellers don't question it until the offer arrives. The expectation is: I agree on a price, I get paid, and I leave. The reality in the vast majority of deals in the Spanish mid-market is different.
The price is usually structured in several components. One part is paid at closing (upfront), another is temporarily held in an escrow account (escrow) to cover post-closing contingencies, and another may be tied to future targets through an earn-out clause. In deals with deferred payment, part of the price is paid in installments over months or years.
This structure isn't a sign of mistrust or bad practice. It's the market's standard mechanism for aligning incentives between buyer and seller. The buyer mitigates the risk of contingencies not detected during due diligence. The seller, if the earn-out is well negotiated, can obtain a higher total price than they would with 100% paid at closing — because part of that price reflects future growth that the buyer, without an earn-out, would have discounted.
The key isn't to resist these structures, but to understand them before negotiating and make sure the clauses governing the earn-out — metrics, timelines, calculation rules — are drafted precisely. In our analysis of the 8 SPA clauses that leave the seller most exposed, we explain how to protect yourself on the most sensitive points of the agreement.
“I'll sell when I'm ready to retire”
This is the myth that destroys the most value, precisely because its effect is invisible until it's too late. The logic seems harmless: selling is something I'll do when I retire, so there's no rush. But that logic ignores a fundamental fact about how buyers think.
Buyers are willing to pay more for a business in a growth phase than for one that is coasting or slowing down. If the owner has spent three years scaling back, if there's no operational succession plan, if investment in product or people has stopped, the buyer sees a business that depends on someone who already has one foot out the door — and adjusts the price accordingly.
The best time to sell doesn't coincide with the moment the owner wants to stop working. It coincides with the moment the business is in its best position to be acquired: growing, with a team capable of running it without the founder, with its finances in order, and with a visible pipeline.
The industry's standard recommendation is to start preparing one to three years in advance. That time lets you put your finances in order, professionalize management, reduce founder dependency, prepare a succession plan and, if it makes sense, invest in growth that improves valuation multiples. We've published a complete guide on how to sell a going concern that covers this entire process.
What these myths have in common
None of these five myths is absurd. They all stem from instincts that seem reasonable from the perspective of a business owner who has never sold a company before — which is the situation of most sellers in the mid-market. Selling an SME is, by definition, something most business owners do only once in their lives.
What the five myths share is that they lead the seller to make decisions with incomplete information: limiting the pool of buyers, delaying the start of the process, not seeking specialized advice, or not anticipating the actual payment structure. In every case, the result is value left on the table — not because of bad luck, but because of expectations that don't match how the market actually works.
The first step to avoiding this is precisely that: understanding how M&A processes work before starting one. If you're in the early stages of considering a sale, you can start with our guide to the stages of an M&A deal or the 6 keys to preparing your SME before meeting with buyers.
