Is it possible to sell a business without a business broker?
When preparing to sell a business, you will need to decide how to approach the sale process. This may raise the question – should I appoint a business transfer agent to support the sale process, or should I sell my business myself?
Many factors will affect this decision, from the cost of appointing a business broker or business transfer agent, to your professional involvement in the business transfer industry and your relationship with potential buyers. If you have the resources, understanding, qualifications and connections to sell a business yourself, you may choose this route to retain control over the sale of the business.
Time is money
Many business owners are often under the impression that if they sell a business without a broker, they can save money on fees. Although business brokers charge a fee, they will save you time which can be just as valuable as money.
It’s natural for businesses that are newly listed to generate more interest over a historically listed business that is slowly ageing. As such, it’s crucial to disseminate the message that your business is up for sale as soon as it is listed on the market.
Valuable connections
Business brokers have networks of connections that they use to spread the word which makes them an arguably worthwhile investment. If you have a suitable buyer with the all-clear on due diligence and funds ready to buy your business, you may choose to sell a business on your own.
The sale must be handled with care as many administrative and legal requirements must be fulfilled, such as an airtight contract and expertly coordinated communication between all parties involved, from legal professionals to tax consultants.
- Previous sales and acquisitions experience
- Sector specialisms and average success rate
- Sales value expectations and growth potential
Business valuation techniques
A crucial part of preparing to sell a business is calculating how much the business is worth. This will then be used as a starting point to work out a sale price that best mirrors the value of the business and the maximum offer potential buyers are willing to make.
Many business valuation techniques that can be used to value a business, from an asset valuation, entry cost, to discounted cash flow, which is why support from a professional business valuer is advised. A business valuer can establish a benchmark from similar sales data when valuing a business to minimise the likelihood of overvaluing or undervaluing.
An accurate sale price is often hard to determine without comparable sales data to hand.
If you sell a business on your own, you may wish to outsource the business valuation stage to a professional with the qualifications, experience, and skills to value a business. If you choose to value a business on your own, you must have the knowledge, skills, and professional qualifications.
Can I sell a business privately?
A business owner with professional experience in business sales may choose to sell a business privately, or typically if they have a buyer already lined up. Although the incentive to save on broker fees may be convincing, check that there is a cost saving by taking into consideration the cost of listing your businesses on online platforms, producing advertising collateral, preparing legal documents, and conducting due diligence.
The business sale process is not straightforward and is therefore typically handled by a professional advisor with the knowledge, skills, and experience to drum up competition and attract suitable potential buyers. Business transfer agents have a wealth of resources and tools available at their disposal to navigate the business sale process.
For more information on selling a business, get in contact with a member of the Selling My Business team.
