Q1 Market Pulse: The Numbers Are In

But What Are We Actually Learning

Another quarter, another Market Pulse report. Brokers repost it. Advisors nod at it. Sellers didn't even know it existed, and yet, we keep pretending it tells the whole story.

It doesn't; not unless we talk about what the numbers actually mean.

Here at Elite Business Exchange, we develop tools for brokers; but we interpret the market too (we like reminding you we don't just write awesome articles). Here's our unbiased opinion on Q1 2025

Industry Failure: 80% of Sellers Still Don't Plan Their Exit.

That's Not Just a Stat; It's the Norm

Here's what nobody is saying to themselves or to each other: we're doing a terrible job of educating owners about the single biggest transaction of their lives. In Q1, 90% of sellers were first-timers, and 80% of those, had no exit strategy. That means most of the deals being done right now are reactive, emotional, and under-prepared.

Why?... Because brokers are too busy chasing listings and throwing crap at the wall to see what sticks instead of building trust and actually consulting sellers. We're treating the industry like it's some kind of "used car lot"... Milage... Leaks... Dents.... just buff it out, it'll be okay?

And sellers; those poor, uninitiated sellers, think planning an exit means updating the P&L and calling it a day and who can blame them? Their broker ran a spreadsheet valuation, asked a few question, couldn't begin to tell you the market fluctuations in their industry or zip code and didn't even begin to tell them what happens after the LOI.

If this industry doesn't start taking education and early planning seriously, we're going to keep grinding through half-baked deals that are a nightmare to coordinate and leave a lot of value on the table.

Takeaway:

• Start conversations 2-3 years out: Brokers need to stop treating listings like speed dating. Build trust early and you'll close cleaner, more valuable deals later. You may even be able to monetize your exit consulting.
• Create pre-exit packages: Standardize a free or low-cost "exit prep kit" with checklists, valuation previews and tax planning tips. Explain to clients how much value systems and processes actually add. Write it in a colorful graph. Give them crayons if you have to; just educate them.
• Use tech to educate: Webinars, explainer videos and email drip campaigns can scale your expertise and position you as the go-to long before sellers are "ready".

Advisory beats urgency, every single time

Multiples Dropped and Everyone Shrugs?

Here's the elephant in the room: valuation multiples in the $5M - $50M range dropped a full point. That's not "normal market fluctuation", that's a clear indicator that buyers are getting choosier and some of these businesses aren't holding up under scrutiny.

But, instead of asking why multiples are slipping, we brush past it like it's a rounding error.

Here's a thought; maybe, just maybe, those flashy revenue numbers aren't cutting it anymore. Maybe buyers actually care about systems, teams, and sustainable cash flow. Maybe they aren't only focused on SDE and EBITDA; maybe they've realized they don't want to buy a job. Buyers want sustainable businesses.

Oh, and lets not pretend we didn't know that buyers have gotten a lot more sophisticated since the rise of YouTube and social media. AI is also changing the game (ask us how we know)

Takeaway:

• Focus on operational strengths, not vanity metrics: Help sellers document systems, staff retention and recurring revenue. Be a guide, not a used car salesperson.
• Build better CIMs: Stop treating confidential information memorandums like a build-a-bear afterthought. The quality of your CIM should earn the multiple.
• Qualify buyers harder: Sophisticated buyers expect depth. If you or your seller aren't ready for real questions, you're not ready for a real price.

Multiples follow trust, trust follows proof

Due Diligence Is Stretching

And It's the Brokers Fault.

Five and a half months of due diligence isn't just a timeline; it's a symptom of bigger issues. Buyers don't trust what they're seeing and who can blame them?

Most sellers can't produce clean financials without a full forensic accounting effort. Most brokers aren't helping prepare them for the exit and frankly, most brokers don't know how to prep a deal room. Oh, and most deal room platforms are still pretending it's 2014.

Here's the thing: if your listing package looks like a Craigslist ad stapled to a Word doc, you deserve the extra 90 days of back-and-forth. Professionalism isn't optional; it's the bare minimum.

Takeaway:

• Build data rooms upfront. Get organized before the LOI. Use platforms that allow secure document storage, sharing, and communication. (Psst.... I know a guy that's doing this)
• Outsource diligence prep: Don't rely on the seller to "figure it out". Bring in pros to clean everything up.
• Set buyer (and seller) expectations early: A great deal process is like conducting an orchestra, not jamming with a garage band. Create milestone based timelines and stick to them.

Time kills deals. Speed comes from structure

The Industry is Evolving. Are You?

Buyers are more educated. Sellers are showing up late to their own party and private equity is devouring everything in sight.

So the real question isn't "What happened in Q1"?

It's "Are you operating like it's still Q1 2019"?

If you're a broker still using spreadsheets, generic email templates, and the good ol' "I've done this for 20 years, I know what the market in Tuscaloosa, TN looks like" (while sitting in your office in Idaho), you are part of the problem.

If you're an advisor or brokerage owner who still thinks AI and automation are gimmicks; don't be mad when the "new guy" bypasses you with better tools and better results.

Takeaway:

• One login, one dashboard: If you're still managing deals through email chains and Dropbox folders, it's time to upgrade.
• Automate the basics: Valuations, buyer screening, market analysis? These should run without you. Use tools built for brokers, not repurposed from real estate.
• Build a modern buyer experience. Think guided tours, not file dumps. Lead with integrity and clarity, not lost emails and broken links.

Here's the Bottom Line

The Q1 Market Pulse isn't just "scan-over" data; it's a mirror. A lot of folks in this space wont like what they see. They'll shift the blame to politics, tariffs, and economics while avoiding accountability for their role in the industry. For the rest of us, we'll probably pose for a selfie in front of that mirror, we don't mind changing to meet the market.

Because, in our opinion; the market isn't slowing down. It's changing. Evolving and correcting course. Are You?

At Elite Business Exchange, we don't just give brokers a platform. We give them the tools, insights, and strategic edge to stay sharp: week after week. Elite Business Exchange was built for brokers, by brokers. We built it from real world experience for those who lead the deal.

Marcus Inman Founder: Elite Business Exchange:

marcus.inman@cnhstrategies.com

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