Selling a company is difficult, but is it better to do so alone or with a broker? We break down the pros and cons of selling your business yourself here.
Building a successful business takes grit, late nights, and endless problem-solving. But eventually, many founders reach a point where they are ready to exit. Whether you want to fund a new venture or retire, the decision to sell raises a significant question immediately. Should you hire a broker to manage the sale, or should you handle the process yourself?
Opting for a “For Sale By Owner” approach can seem attractive, especially given the potential savings. However, the process involves complex financial audits, legal negotiations, and time-management challenges that can overwhelm even the most experienced entrepreneurs. Below, we outline the pros and cons of selling your business yourself.
The Advantages of the DIY Exit
The most obvious reason founders choose to sell their businesses is the bottom line. Business brokers typically charge a commission of 10 to 15 percent of the final sale price. For a company selling for $500,000, that is a substantial chunk of equity staying in your pocket rather than going to a middleman. By managing the sale, you maximize your financial return on the exit.
Beyond the money, you maintain complete control over the narrative. As the founder, you understand your supply chain, customer acquisition costs, and churn rates better than any outsider ever could. You can explain the intricacies of your tech stack or roadmap directly to potential buyers without diluting the message. This direct line of communication helps build trust with a buyer, as they receive answers directly from the source.
The Downsides of Selling Solo
While there are many pros to selling your business yourself, there are also cons. While keeping the commission fee sounds excellent, the DIY route requires a significant time investment. Preparing a prospectus, vetting potential buyers, and managing due diligence acts as a second full-time job. While you focus on selling the company, you may struggle to maintain day-to-day operations. If you want to sell your business fast and for the best price, a business broker is a worthy investment.
Valuation and negotiation also present significant hurdles for founders. You likely have an emotional attachment to the brand you built, which can cloud your judgment about the business’s actual value in the current market. Experienced buyers might leverage your lack of deal-making experience to negotiate a lower price or unfavorable terms. Plus, selling yourself makes a confidential sale difficult, as customers, suppliers, and employees may find out the business is up for sale, which can cause panic and confusion.
Making the Right Call for Your Exit
Deciding between a broker and a DIY sale depends on your resources and risk tolerance. If you have previous experience with mergers and acquisitions and have the capacity to manage a complex legal process, selling yourself yields a higher financial reward. However, if you need to keep your focus on growing the company and maintaining its value, broker support is worth the cost. Analyze your situation carefully to ensure you leave your business on your own terms.
