Selling on your own vs. with a broker

The short version

• Both paths can work. Neither is right for every owner.
• A [broker](/learn/reference#business-broker "A person or firm paid, usually a percentage of the sale price at closing, to value a business, prepare the materials, find and screen buyers and manage the process. What a broker does and does not do is its own piece.") does much of the work and earns a fee, usually paid at closing.
• Selling on your own keeps that fee and puts the work on you.
• Either way you need your own M&A attorney and an accountant.
• Most owners make this call early, often before they know what the business is worth. It is worth making on purpose.

Two paths, side by side

With a broker

• The work. The broker prepares the main document buyers read, called a [confidential information memorandum](/learn/reference#confidential-information-memorandum "The document that describes a business for sale to a buyer who has signed a non-disclosure agreement. The numbers, the history, the customers, the people and the reason for selling.") or CIM. They help build the data room, a secure online folder of the documents a buyer will check. They also market the business, screen buyers and manage the process. You answer questions and make the decisions.
• The cost. A fee, usually a percentage of the sale price paid at closing. Lesson 2.3 covers how it works.
• Reach. The broker brings their own network of buyers and their marketing.
• Confidentiality. The broker is the first contact, so buyers learn who you are only after they have been screened and signed a confidentiality agreement.
• Control. You agree to terms with the broker, often including a period when only they can sell the business.

On your own

• The work. You prepare the CIM and build the data room, a secure online folder of the documents a buyer will check. You find buyers, screen them and manage the process. Your attorney and accountant still do their parts.
• The cost. No broker fee. You spend your own time, and you may pay advisors for some of the work a broker would have done.
• Reach. You rely on your own network, your industry and direct outreach.
• Confidentiality. You are the first contact, so you control what each person learns and when.
• Control. No agreement with a broker. Every decision and every conversation is yours.

What decides it

A few questions usually settle it.

• How much time can you give this while still running the business well?
• Do you already know a likely buyer?
• How comfortable are you negotiating price and terms?
• How complex is the business: several locations, many employees, real estate, contracts that must transfer?

Neither path is permanent. Some owners start on their own and bring in a broker later. Some brokers will agree to exclude a buyer you already know from their fee. Lesson 2.4 covers how.