OnwardLearn · Selling · Step 2. Decide how to sell
What selling on your own involves
The short version
- Selling on your own means doing the work 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.") would do: pricing, the [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.") (CIM) buyers read, the data room, finding buyers, screening and managing the process.
- You keep the broker's fee. You spend your own time.
- More of the tools are available to owners now than in the past.
- You still need your own M&A attorney and accountant.
- The hardest part is usually keeping the business running well while you sell it.
The work, stage by stage
Pricing. You set the asking price. An independent valuation or published benchmarks give you a number you can explain. Lesson 1.3 covers valuations. Step 3, Learn what buyers would pay, covers how value is worked out.
The CIM. You prepare what buyers read: a short anonymous description and the CIM, the full document about your business. Lesson 2.6 covers both.
Finding buyers. You reach buyers through your network, your industry and direct outreach. Lesson 2.7 covers where they are.
Screening. You ask each buyer to sign a confidentiality agreement and to show they can pay before you share details.
Meetings and questions. Buyers ask many questions, often the same ones. You answer them, or your accountant helps.
Negotiation. You compare offers and negotiate the [letter of intent](/learn/reference#letter-of-intent "The offer document. It sets out the price, the structure and the main terms, and starts diligence."), the first written offer that sets price and terms. Your M&A attorney reviews it before you sign.
The data room. A data room is a secure online folder that holds the documents a buyer will check: tax returns, financial statements, leases, contracts and more. You gather the documents, organize them and decide which buyer sees which documents, and when. Your accountant can help pull the financial records together. Lesson 2.6 covers what goes in it.
Getting to closing. After you sign, the buyer checks everything in the data room and more, called due diligence, and the buyer's lender runs its own review. You keep both moving.
What is easier now
Owners have more to work with than they once did. Benchmarks for what businesses sell for are published by industry associations and universities. Lenders publish what they need from a buyer. Advisors can be hired for single pieces of the work, such as a valuation or a review of your CIM.
What does not change
Your M&A attorney and your accountant do the same work either way. Selling on your own adds work to your week, not to theirs.
The real cost is time
A sale can take many months, and most of that time you are still running the business. Buyers and lenders look closely at results during the sale. Keeping the business strong while you sell it is part of selling it.
When you are ready to talk to someone
Nobody needs to know you read this. When you are ready, these are the questions to bring.
- For your accountant: "Can you help me prepare the numbers a buyer will ask for?" Listen for: a yes, and which years and statements they would start with.
- For your M&A attorney: "Which documents should I have ready before I talk to a buyer?" Listen for: a confidentiality agreement first, then a short, specific list.
- For your accountant: "Which financial documents should go in my data room first?" Listen for: a specific list, starting with three to five years of tax returns and financial statements.
- For yourself: "How many hours a week can I give this, and who covers for me while I do?" Listen for: an honest number. If no one can cover for you, that is part of the answer.
When you’re ready
What is the business actually worth? Start there — no account, no contact, no obligation. Find out what it's worth