Do businesses really sell for 94 percent of asking price?

The figure is accurate for what it measures. BizBuySell's quarterly Insight Report compares each business that sold to its own asking price, which has often already been reduced during the marketing period. It is a within-deal comparison and it can only include businesses that actually sold. It does not tell you how often price is the reason a business never sold at all.

What is the gap between asking price and what buyers actually pay?

Comparing populations rather than individual deals, active listings in the Felpel Private Company Index carry a median asking multiple of 3.26 times SDE while 2,820 verified-sold transactions clear at 2.58 times. Clearing is therefore about 79 percent of the asking multiple, which is a 21 percent discount off the ask, or equivalently the ask sits about 26 percent above the clearing multiple. Those are the same arithmetic stated two ways.

Why is there so little data on what small businesses actually sell for?

Private transactions carry no disclosure requirement, so the only parties holding completed sale prices at scale are brokers and marketplaces. Their revenue comes from listings rather than from transparency, and a published clearing price that sits below typical asking prices is not commercially useful to them. The result is that asking prices are abundant and public while clearing prices are scarce.

Is the asking versus clearing gap affected by timing?

Yes, and it is a real limitation. In this dataset the two populations are not matched on time. Active listings are concentrated in early 2026 while verified-sold transactions span 2014 to 2026, so some part of the observed gap may reflect the period rather than seller behavior. The direction of the effect is consistent across cuts, but the precise size should be read with that caveat.

Private Market Data

Businesses sell for 94 percent of asking price. The ones that matter never sold.

The most quoted number in small business M&A is accurate and it misleads almost everyone who repeats it, for a reason that applies to most private market statistics.

If you are selling a business, somebody has already told you the comforting number. Small businesses sell for about 94 percent of their asking price. BizBuySell publishes it quarterly, brokers quote it in listing presentations, and it gets repeated across every forum where owners ask what their company is worth.

The figure is correct. It is also one of the most misleading things you can be told before you set a price, and the reason is a problem that runs through almost all private market data.

What the number can and cannot contain

The 94 percent figure is a within-deal comparison. It takes a business that sold, looks at the price it sold for, and compares that to the asking price on its own listing. Do that across thousands of closed transactions and you get a ratio a little under one.

Two things are quietly doing a lot of work there.

The first is that the asking price in the denominator is frequently not the original one. Listings get reduced during the marketing period. A business that opened at a number, sat for eight months, cut twice and then sold is measured against the reduced figure, not the ambition it started with.

The second is larger. The statistic can only include businesses that sold. It is computed over closings, so a business that was priced far too high and never found a buyer contributes nothing to it. It is not counted as a bad outcome. It is not counted at all.

This is survivorship bias in its cleanest form. A seller who prices 40 percent above what the market will pay does not typically sell at 94 percent of that number. They do not sell. And by not selling, they exit the sample that produced the 94 percent in the first place.

So the statistic answers a narrow question accurately: among businesses that found a buyer, how close to the final ask did they land? It does not answer the question an owner setting a price actually has, which is whether this price will find a buyer at all.

What you see when you compare populations instead

A different comparison is available if you stop looking inside individual deals and look across groups.

In the index I maintain, active listings carry a median asking multiple of 3.26 times seller's discretionary earnings. The 2,820 transactions verified as actually sold clear at 2.58 times.

I want to state that arithmetic carefully, because it can be said three ways and people pick whichever sounds strongest. Clearing is about 79 percent of the asking multiple. That is a 21 percent discount off the ask. Equivalently, the ask sits about 26 percent above where comparable deals close. Those are the same fact. Anyone quoting the 26 percent without saying which direction it runs is rounding toward drama.

Both numbers can be true at once, and they are. Closed deals land near their final ask. The asking population as a whole sits well above where deals close. The difference between those two statements is entirely the businesses that listed and never sold, and they sit in one sample and not the other.

Where my own number is weak

The honest limitation, since I am asking you to doubt somebody else's statistic: my two populations are not matched on time. Active listings in this dataset concentrate in early 2026, while the verified-sold transactions span 2014 to 2026. Some part of the gap I just described may be the period rather than seller behavior.

The direction holds across every cut I have run, and the mechanism is not controversial. The precise size should be read with that caveat attached, and I would rather you heard it from me than found it yourself.

Why this particular gap never gets closed

It is worth asking why, in a market where millions of businesses change hands, the easily available price data is almost entirely asking prices.

Private transactions carry no disclosure requirement. Nobody has to file what they paid. The parties who do hold completed sale prices at any scale are the brokers and the marketplaces, and their revenue comes from listings rather than from transparency.

Think about what a published clearing price would do to that business. It would tell every prospective seller that the number on the listing page is roughly a quarter above where their deal will land. That is not a commercially attractive thing to publish when your revenue depends on owners choosing to list with you.

I do not think anyone is being dishonest. The incentives simply do not point at this. Asking prices are abundant because publishing them is free and useful to the publisher. Clearing prices are scarce because publishing them is costly and useful mainly to the other side.

And I should implicate myself here, because the same logic applies. I am not a disinterested party. I build valuation software, and a world where owners distrust asking prices is a world with more demand for what I sell. That is exactly why I publish the dataset, the sample sizes, the quartiles and the limitations rather than just the headline, and why the whole index is a downloadable file you can check without asking me anything. An argument that relies on trusting the person making it is not much of an argument.

The general version of this mistake

The pattern is worth carrying beyond this one statistic, because it recurs everywhere in private markets.

Almost every number you can easily obtain about private deals is conditioned on the deal having happened. Average time to close is measured over deals that closed. Typical diligence findings come from diligence that was completed. Multiples are reported for transactions that occurred. The failures are not hidden by anyone; they are simply not in the dataset, because nothing generates a record when a deal quietly does not happen.

So the useful instinct, whenever someone hands you a reassuring private market number, is a single question: what would have to not happen for a case to be excluded from this? If the answer is "the thing you are worried about", the statistic is not reassuring you about anything.

What to do with this

If you are selling, do not take 94 percent as permission to price high and negotiate down. The real risk at the top of the range is not a lower price, it is twelve months of marketing followed by no sale, a stale listing and a worse position than if you had priced correctly at the start. Price against what comparable businesses closed at, not against what comparable businesses are asking, because the asking population includes everyone who is currently failing to sell.

If you are buying, the asking price is a weak signal and you should treat it as one. The spread between ask and clear is where your negotiating room lives, and it is wider than the 94 percent figure suggests, because you are not negotiating against the final reduced ask. You are negotiating against the original one.

If you are advising, the most valuable thing you can tell an owner is the number that costs you the listing. It is also the one that gets the business sold.

Go deeper

If you are pricing a business to sell, or pricing one to buy, and you want the number built from closed transactions rather than from listings, that is the work I do.

Book an advisory session Try Value Alpha The Valuation Index

Tomasz Felpel is an investor, founder, and advisor in private markets, based in New York. He publishes the Felpel Private Company Index and has priced more than a thousand private companies.