Can you sell a business without a broker?

You’re a confident, successful entrepreneur, a skilled negotiator, and nobody knows your business like you do. When the time is right to sell your business you intend to be heavily involved in the selling process. The big question is do you enlist the services of a business broker or decide to approach buyers directly?

“I’m the best person to sell my business”

There are many reasons why an owner might think they are best placed to sell their business. In fact we hear this one fairly often. You might be put off by a broker’s fees, not being in complete control of the sale process, or fearful that confidential information might leak out to the press, employees or customers. You may believe that selling a small business will be a fairly easy task, especially if you already have a buyer in mind, e.g. a supplier or competitor, but years of managing a business can’t prepare you for the complexities of a company sale.

These are all valid reasons, but in choosing to go it alone you are leaving yourself open to certain risks. In this post we’ll discuss the risks of selling your business without an agent and how the support of a business broker can guide you through them.  

The risks of selling your business without support

Selling a business is a complex process

Business sales are rarely straightforward. Most involve solicitors, accountants and surveyors as standard, while others require input from landlords, local authorities and other subject matter experts. Then there’s the legal jargon and where to start with due diligence. Part of a broker’s job is to explain what is likely to happen at each stage of the sale process and explain the terminology involved, so the vendor feels confident throughout.

The problem of unrealistic valuations

It’s very common for there to be a mismatch between vendor and buyer valuations, which can hinder progress. A broker has the skills to smooth and mediate this process, helping each party to understand the true value in the business. If one party won’t budge on their valuation, a broker may be able to negotiate deal terms that are acceptable to both sides.  

Ready to get a realistic valuation of your business? Get in touch here.

It could take longer than you think

If a business sale is straightforward it could go through in a matter of weeks, however some business sales take years to complete. Finding the right buyer, negotiating terms, complex due diligence, a buyer pulling out – do you have the energy and motivation to navigate these hurdles over an extended period of time?

Vendors are often surprised how lengthy and complex the process is and how much it takes out of you. Selling a business is a full-time job and it’s nigh on impossible to manage a growing business at the same time. 

You can’t predict the challenges involved

Every business sale presents unexpected challenges. A surprise reduced offer, legal loopholes, tiny details and buyer demands you didn’t account for. A broker uses their intuition and experience of selling businesses to identify potential pitfalls and challenges before they become problems. They can filter out buyers who aren’t genuine and manage negotiations with serial investors. If you went into negotiations with a professional investor who has purchased multiple businesses on your own, how do you think you would fair? 

Where to list?

We’re all familiar with Rightmove, Zoopla and Purple Bricks. When it comes to selling your home these are trusted household names. But would you know how to write the sales particulars for a business for sale or how to write and post an ad to find your ideal buyer? A broker has access to networks allowing vendors to reach people who are already interested in acquiring businesses. This can create competition between interested buyers, potentially leading to higher offers.

Find your local Business Partnership office to connect with a broker who is experienced in your sector.

Emotions stop play

What will you say when you meet an interested buyer for the first time? Will you be able to leave your emotions and personal connection to your business behind. A broker will plan the conversation carefully to present you and your business in the best possible light. They may structure the conversation so that you’re not involved in the more emotive parts, maintaining professionalism, objectivity and neutrality at all times. 

Do you need the services of a business broker?

If you want to, you can sell your business without using the services of an agent or broker. Selling direct may save on fees, but the cost of the additional risks you take may outweigh those savings.

A trusted, reliable broker who has experience of business sales in your sector is worth their weight in gold. Acting as an intermediary they will protect your personal and business interests, find your ideal buyer, and showcase your company in the best light. As they guide you through the sale process, their skills in valuation, negotiation, problem solving and managing buyer expectations will show their worth. In choosing not to use a business broker to sell your business, you could miss a minor detail that turns out to be critical to the deal and impact your future plans. Is this a risk you are willing to take? 

To avoid unnecessary risk when selling your business, talk to Business Partnership today. Your business broker will guide and support you every step of the way from initial valuation right through to signing on the dotted line.