Business Broker vs DIY Sale: Which is Right for You?
Deciding between selling with a broker or doing it yourself? Compare the costs, benefits, and outcomes to make the best decision for your situation.
Quick Comparison
| Factor | Business Broker | DIY Sale |
|---|---|---|
| Cost | 5-10% commission | No broker fee |
| Sale Price | Typically 15-30% higher | Often lower due to pricing/negotiation |
| Time to Sell | 6-12 months average | 9-18 months average |
| Buyer Network | Access to qualified buyers | Limited to your network |
| Confidentiality | Professional protection | Higher risk of leaks |
| Negotiation | Expert negotiation | You handle it yourself |
| Your Time | Minimal involvement | Significant time required |
Detailed Comparison
Selling with a Business Broker
Pros
- ✓Higher sale prices: Brokers typically help you sell for 15-30% more through professional valuation, marketing, and negotiation
- ✓Access to qualified buyers: Brokers have networks of serious, pre-qualified buyers you can't reach on your own
- ✓Confidentiality protection: Professional processes protect your business identity and prevent employee/customer disruption
- ✓Expert negotiation: Brokers negotiate better terms and prices than most owners can achieve themselves
- ✓Time savings: You can focus on running your business while the broker handles the sale process
- ✓Professional marketing: High quality marketing materials and strategic positioning maximize buyer interest
- ✓Transaction expertise: Brokers guide you through due diligence, legal requirements, and closing complexities
Cons
- ✗Commission cost: 5-10% of sale price (though often offset by higher sale price)
- ✗Less control: You work with the broker's process and timeline
- ✗Finding the right broker: You need to vet brokers to find one who's experienced and trustworthy
Selling Your Business Yourself
Pros
- ✓No broker commission: You keep 100% of the sale price (minus other transaction costs)
- ✓Full control: You control the entire process, timeline, and buyer selection
- ✓Direct communication: You communicate directly with buyers without intermediaries
- ✓If you have a buyer: If you already have a qualified buyer lined up, you may not need a broker
Cons
- ✗Lower sale prices: Without professional valuation and negotiation, you often leave money on the table
- ✗Limited buyer pool: You can only reach buyers in your network, missing many qualified prospects
- ✗Confidentiality risks: Harder to maintain confidentiality, risking employee/customer relationships
- ✗Time intensive: Selling a business requires 20-40 hours per week of your time
- ✗Unqualified buyers: You'll waste time with tire kickers and buyers who can't actually close
- ✗Legal risks: Mistakes in contracts, disclosures, or negotiations can be costly
- ✗Emotional decisions: It's harder to stay objective when negotiating your own business
When to Use Each Approach
Use a Business Broker When:
- •You want to maximize your sale price and get the best possible deal
- •Confidentiality is critical (employees, customers, or competitors shouldn't know)
- •You don't have time to dedicate 20-40 hours per week to the sale process
- •You lack experience with business transactions and negotiations
- •Your business is complex or has unique circumstances requiring expertise
- •You need help with valuation and pricing strategy
- •You want access to off market opportunities and qualified buyer networks
Consider DIY Sale When:
- •You already have a qualified buyer lined up (family member, employee, competitor)
- •Your business is very small (under $100,000) where broker fees may not make sense
- •You have extensive transaction experience and strong negotiation skills
- •Confidentiality isn't a concern (business is already publicly for sale)
- •You have significant time to dedicate to the sale process
- •You have a strong network of potential buyers in your industry
Cost Comparison Example
Let's say you're selling a business worth $500,000. Here's how the numbers compare:
With Business Broker
*Broker helps achieve 15% higher sale price through professional valuation and negotiation
DIY Sale
*Lower price due to lack of professional valuation and negotiation expertise
In this example, using a broker nets you $29,000 more, even after paying commission
The Hidden Cost: Your Time and Energy
Beyond the financial numbers, selling a business yourself requires significant time and energy. Here's what a broker handles for you:
Typical DIY Sale Time Investment
With Business Broker
*Mostly reviewing offers and making final decisions
DIY Sale
*At $100/hour value, that's $27,500-$35,000 of your time
The Real Cost of Your Time
If you value your time at $100 per hour (conservative for a business owner), the 275-350 hours spent on a DIY sale represents $27,500-$35,000 of your time. This doesn't include:
- • The stress and mental energy of managing the entire process
- • Time taken away from running your business (potentially hurting its value)
- • Opportunity cost of not focusing on other priorities
- • Risk of making costly mistakes due to inexperience
When you factor in the time value, using a broker not only nets you more money but also saves you hundreds of hours of work and stress.
Real World Examples
Example 1: Retail Business Owner
A retail business owner tried selling his $800,000 business himself for 18 months. He received several low offers and struggled with confidentiality issues when word got out. After hiring a broker, the business sold for $920,000 in 7 months. Even after the 8% commission ($73,600), he netted $46,400 more than his best DIY offer, plus saved 11 months of his time.
Example 2: Service Business with Existing Buyer
A service business owner had a long time employee who wanted to buy the business. Since they already had a qualified buyer and agreed on terms, they completed the sale without a broker. This made sense because they avoided broker fees and the buyer was already identified and qualified. However, they still hired an attorney to handle the legal aspects.
Example 3: Manufacturing Business
A manufacturing business owner needed to sell quickly due to health issues. He initially tried DIY but couldn't find qualified buyers in his network. A broker connected him with three serious buyers within 2 months, and the business sold for $1.2 million (15% above his initial asking price). The broker's network and marketing made the difference.
Not Sure Which Approach is Right for You?
Every business and situation is unique. Let's discuss your specific circumstances and help you make the best decision. Get a free, no obligation consultation to explore your options.