When Should I Consider Selling My Business Myself?

As a business broker, I am often contacted by potential clients who have tried to sell their business themselves without success. In some cases, they simply never received any takers. Others have found potential buyers, only to find that they were not qualified financially AFTER confidential information had been shared. There have even been instances when the previous owner took back a severely damaged business after the buyer was unable to make the payments on a Seller’s note.
In most of those situations, having hired an experienced business broker to guide them through the process would have kept them out of the rough spots by knowing better ways to advertise, vetting potential buyers financial wherewithal before showing disclosing any corporate materials, and helping to structure the purchase price to greatly increase the amount of money received as cash up front.

When For Sale By Owner Makes Sense

This is not to say that there is never a time in which “for sale by owner” makes sense. Certain circumstances make it the ideal alternative to hiring an intermediary. If your company has not been consistently profitable, potential buyers will probably see most of its value in the things the business owns. Liquidating inventory and equipment can be done by placing a few ads, showing prospective buyers the items (whether in person or online), negotiating a price both parties consider to be fair, and then collecting the money. There is no need to involve anyone else, as it wouldn’t add any value.
This approach is also what we would suggest for owners of home service providers who do the work themselves where there is high competition, low margins, and no long term contracts (most landscaping, pool cleaning, maid service). Although the list of customers does have some value, without contracts obligating the customers to continue on with the new owner, that list essentially becomes warm leads. A few calls to competitors might result in some offers.

Experience is Often Worth the Cost

When the business is profitable, however, it can pay to get an intermediary involved. Experienced business brokers can keep you from pitfalls involved in the steep learning curve involved in selling a business, and they can help you come out ahead in the long run, even after paying their fee.
Acquisition Services Group works on a success fee basis; we get paid when you do, out of escrow after your business has closed. Contact us for a free business valuation with no obligation.