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How to Sell a Small Business Without a Broker

Michelle Lindner February 8, 2022

How to Sell a Small Business Without a Broker

You’ve successfully built up a small business and are now turning your focus to putting an exit strategy in place.

There are two options available to you when selling your business: selling with a broker or selling privately.

Going the private route may seem like an attractive option because you’ll save on commission fees, which in theory puts extra money in your pocket.

But is that true? And is it really easier for small business owners to sell privately?

Before you take the leap on a private deal, you’ll need to have everything in place for a successful sale.

How do you do that, though? Let’s take a closer look.

Prepare Your Business for Sale

Whether you sell with or without a business broker, you’ll need to get your business ready for sale before it goes to market. But what exactly does that entail?

Get Your Business into Shape

Sellers are understandably attached to what they’ve built. If you’ve been able to build up a profitable digital asset, you can probably just imagine all the interested potential buyers competing over your baby.

This is why it sometimes comes as a surprise to first-time sellers that just because a small business is profitable doesn’t guarantee it will be attractive to buyers.

So what do buyers look for in a business?

It depends on the business model, but some of the major areas they focus on include:

Brand Strength and Defensibility: Are your products/services unique? Are the products/services high quality, as shown by solid reviews and repeat customers? Do you have a trademarked brand?

Age and Growth: Do you have an established business with a solid financial history? Can you show an increase in year-over-year revenue?

Revenue Streams: Are your revenue streams both diverse and consistent? If you have a single source of revenue, is there room for a buyer to mitigate risk by launching onto different platforms or creating additional revenue streams?

Additional Assets: What are you selling with your business? Do you have a solid, monetized email list to increase the appeal of your business? Do you have engaged social media channels driving traffic and sales?

Operational Processes: What do your day-to-day operations look like? Have you streamlined and automated most of your day-to-day tasks? Are you offering a mostly passive business, or are you asking buyers essentially to take on a full-time job?

There are limited situations where streamlined operations or additional assets might not tip the scales much. This is especially true when you’re working with large acquisitions companies or seasoned investors who have the ability to manage these processes and create assets themselves through in-house teams.

Working with the big names might seem like both an exciting and easy option, but it could put you at a disadvantage.

These professionals have the upper hand in negotiations, so while you could end up with a quick sale, you might also be walking away with significant capital left on the table.

In addition to having the power to outmaneuver the average seller, these savvy investors also know how to leverage seller fatigue. This could result in you accepting hundreds of thousands less than your business is actually worth.

The ideal thing to do is get your business in the best shape possible to appeal to a wide buyer pool and attract competition.

Gathering Documentation

Once your business is in shape and you’re ready to put it up for sale, you’ll have to get all your paperwork in order.

This is the stage where all of your selling points need to be backed up in black and white.

The first place to start is by filling out a detailed profit and loss statement (also called an income statement) that can be verified by potential buyers. You’ll need at least three to five years’ worth of financial history.

If your business hasn’t been around that long, then provide all your financial history from the start of the business.

Avoid the temptation of providing a simple balance sheet. It may be easier for you to put together, but prospective buyers are going to want to see a more comprehensive financial picture.

At this point, it’s time to find an accountant to sign off on your accounts if you don’t already have one. This will put buyers’ minds at ease that your numbers are accurate and verified.

You’ll also need proof that you own all the assets included in the sale.

Gather up all legal documents, employee and supplier contracts, warehouse or equipment leases, and service contracts, as well as useful documents, such as customer lists and marketing plans.

Set Your Price

Now you’re ready to start thinking about the value of your business.

This can be tricky for many sellers. If you price it too low, you’ll be leaving cash on the table. But if you price it too high, you may put off potential buyers who won’t even be willing to negotiate with you.

Getting an accurate business valuation often means paying an accountant or a professional valuator to give you a list price.

However, both of those options cost money, which ultimately takes away from the capital you’re walking away with.

You could always set the price yourself, which won’t cost you anything but time (and could end up costing you money if you get it wrong), but do you know how to value your business?

If you’re a first-time seller approaching valuations, you can use our formula as a baseline for setting a price. We use a 12-month average net profit x monthly multiple.

To figure out your average net profit, you can take your annual earnings and divide them by 12.

After calculating your base figure, you’ll need to start putting in your add-backs. At first glance, this seems like a relatively straightforward process. You essentially “add back” one-off or continual expenses that have no real effect on increasing or decreasing your net profit or overall cash flow.

As a private seller, though, be prepared to justify all add-backs. Savvy buyers may try to get some add-backs thrown out to reduce your overall net profit on paper and justify lowball offers.

Once you’ve got your average net profit, you’ll need to figure out your industry multiple. The multiple is made up of many factors, some of which are mentioned above (brand strength, age, revenue diversity, etc.).

Calculating a multiple is a potential pitfall for private sellers, who often don’t know how to do it. Some small business owners choose to look at what they think are similar businesses and apply the same multiple to their own businesses.

Going this route is something small business owners should be careful with, because even a minor difference in net profit or included assets could drastically alter both the multiple and the ultimate sales price of a business.

Submit Your Business For Sale

Where to List Your Business for Sale?

Once you’ve gotten your business ready and have all of your documentation in place, it’s time to list your business for sale. What are your options if you’re selling without a broker?

For Sale by Owner Marketplaces

There are quite a few dedicated marketplaces that allow anyone to list a business for sale. These sites often charge a fee for you to list your business, which can be a flat-rate fee or a sliding scale, depending on the listing price.

Depending on the platform, there may also be fees due if the business sells on the marketplace, which increases the mounting costs of selling privately.

Social Media Groups

It’s also possible to sell your business through social media. There are groups on Facebook and Discord, for example, that allow you to put your business up for sale. There are even subreddits that allow businesses to be posted, although there is virtually no action on them.

This is a free option, but the caveat is that you have little control over your buyer pool. If something goes wrong with the transaction, you have no recourse through the groups that put you in touch with the buyer.

Private Networking

You might not be able to sell your business on sites such as LinkedIn, but you can use connections on these sites to put you in touch with prospective buyers who might be interested in your business.

The downside is that it could take longer going down this route, and the stakes could be higher if a deal goes wrong with the friend or colleague of a family member, close friend, or important business connection.

Dealing with Buyers: Negotiations and Due Diligence

If you’ve spent the time preparing your business for sale, you might be able to reach a significant number of potential buyers for your business.

But not all buyers are created equal, and you need to prepare yourself for dealing with buyer negotiations and due diligence requests.

Due Diligence

Any buyer who is interested in your business will want to perform due diligence, or the process of researching the business and verifying records to make sure it’s a good fit for their financial goals.

As a private seller, you can lose a lot of time at this point in the process. Not only do you have to work one-on-one with every interested buyer, and hand over any requested documentation, but you also have to figure out how serious each potential buyer is.

This is when you’ll often run into tire-kickers, or people who claim they’re interested but have no real intention of buying your business.

Tire-kickers can be difficult to spot. They may come across as serious buyers, asking a lot of relevant questions about your business operations and products. They may even hint at making an offer.

Having a potential offer waved in front of you can make it difficult to know when it’s time to cut your losses.

A tire-kicker can be a minor annoyance, but they’re generally harmless, other than wasting your time and energy. But there’s another, more dangerous, bad actor lurking in the shadows of private business sales.

These individuals present themselves as serious buyers and gain your trust so they can gain access to your business information and copy your profitable idea. They may poach your suppliers, contact any contractors you have working on the business, and even negotiate lower rates with your freight and storage providers.

They’re more dangerous than a normal competitor, because you’ve essentially given them a roadmap for success.

So, how can you protect yourself and what you’ve built?

You could qualify each buyer by asking for personal financial statements before you give them access to your business information. It’s a time-consuming process, and you might find that private buyers will be very hesitant to give you this information.

Another way you might be able to protect yourself somewhat is by having prospective buyers sign a non-disclosure agreement (NDA) as well as a non-compete agreement (NCA). You may find drafting enforceable NDAs and NCAs difficult without legal advice, and if you come across international buyers, it may be nearly impossible.


Once you’ve found a legitimate buyer and have received an offer, it’s time to negotiate the sales price.

One of the most important things to keep in mind is to negotiate without emotion, although that’s often easier said than done for a lot of business sellers.

After all, your business is your baby. It has probably helped you reach significant financial goals in your life. This can make it difficult to leave emotion out of the equation.

This is where having a realistic and accurate asking price can help. Make a rational decision ahead of time about the lowest sales price you are willing to accept to prevent your emotions or FOMO from pushing you to settle for a lowball offer or make unrealistic counteroffers.

Negotiating without emotion is also essential when your business attracts the attention of savvy investors.

These could be large firms or high-net-worth individuals, both of which are experienced and adept at negotiating sales prices in their favor. You may find yourself at a severe disadvantage when it comes to getting the best price possible for your business when you’re up against these professionals.

A Note About Deal Structures

Part of the negotiations process sometimes involves deal structures. The concept can be overwhelming for first-time sellers, who may be unfamiliar with the concept and the various terms that can come up.

Some earnouts are performance-based, and might be offered when a buyer has concerns about future performance. If there is stiff competition for your business, a performance-based earnout might also be used as a way for a buyer to make a more attractive offer.

Other earnouts are offered as part of seller financing. With traditional financing difficult to come by in the digital asset space, one way buyers can make more attractive offers is by making a cash offer combined with installment payments over a period of time.

It’s worth reading up on the different types of deal structures you could potentially come across so you can negotiate the best possible deal for yourself.

Earnouts can sometimes end up with you walking away for more than your asking price, so although they can be complicated, it’s often good to hear what a buyer has to offer.

But if you take an earnout, be prepared to enlist the help of an attorney and an escrow service provider to protect both sides of the transaction.

Legal Considerations

Once you’ve found a buyer and negotiated a price, it’s time to turn your attention to the heavy parts of the sale—taxes and legal considerations.


If you’ve got a CPA on retainer from certifying your financial records, all the better. If not, you’ll want to start looking for one.

Having a professional accountant by your side is particularly important if you have a complicated business structure or are selling your business to someone who lives in a different country.

If you have a deal structure in place as part of your sales offer, you’ll definitely need the help of an accountant to walk you through the tax implications of receiving several payments over a period of time.

Walking away with a considerable amount of capital at once comes with tax requirements. You’ll want guidance when filing your tax returns or deciding what your next investment options are.


You need to make sure you’re completely protected during and after the transaction, which means that all paperwork should be drawn up by a professional to protect you from liability after the transfer.

This is especially important if you have a product-based business. If the new buyer switches suppliers or launches a new product and ends up in a lawsuit, you don’t want to be held responsible in any way.

If you’ve accepted a deal structure, you’ll want an iron-clad agreement in place that deals with assets and payments. Some of the things you’ll want hashed out include:

  • Who retains control over the assets?
  • Where are the payments made?
  • What happens if payments unexpectedly stop?
  • What if the business declines under the new buyer?

These are just a few of the points you need to consider to make sure you’re protected after the sale of your business.

Migrating Assets

Once you’ve made it past the negotiations and financial and legal hurdles, now it’s time to hand over the assets to the new owner.

This can be a potential minefield for both buyers and sellers. It is essential that you research the migrations process for each asset so you know the proper way to hand them over.

Certain assets can’t be transferred (i.e., eBay accounts). Others are notoriously difficult to transfer without a professional and can result in severe sales declines and account closures (i.e., Etsy and international Amazon listing transfers).

If difficult or impossible-to-migrate assets are included as part of the sales agreement, how much of a problem is that going to pose?

Before you start transferring assets, you need a process in place to guide what will happen if certain assets are lost due to improper transfer, including who will be held responsible for the loss of revenue.

How You Can Simplify the Sales Process

As you’ve seen, it’s entirely possible to sell your business yourself without a broker.

However, when you start adding up the costs of listing your business on a site, such as contracting professionals to certify your financial statements and legal fees, combined with the time and opportunity costs associated with failed or difficult negotiations, asset migration, and buyer vetting, it costs more than you think to sell a business privately.

There are also numerous professional, legal, and financial pitfalls that are easy for first-time sellers to run into, which can make what should be an exciting time in your life and a huge step on your entrepreneurial journey quickly turn into a legal and financial nightmare.

This is why many first-time and seasoned entrepreneurs prefer to work with a reputable broker.

What Does a Good Broker Do?

Business brokers may charge a commission on the sale of a business, but the advantages of working with one can far outweigh the commission costs.

In fact, working with a business brokerage could actually get you more money, even once the broker fees are taken into consideration.

Not only will you have access to a more accurate sales valuation, which already gives you a greater advantage when listing, but you’ll also have sales advisors guiding you through negotiations.

Let’s imagine for a moment that you list your business for sale on a private marketplace for $100K and finally accept an offer of $80K. Later, you find out that with a proper valuation you could have listed on a curated marketplace for $200K. Even accounting for a 15% commission fee, that would have put an extra $90K in your pocket.

Working with a broker can also make the process smooth and simple for business owners and potential buyers alike.

At Empire Flippers, we don’t charge you a fee to list your business. You can get started by using our free valuation tool to get a rough estimate of your business’s worth. If you like what you see, you can submit your business to be considered for inclusion on our marketplace. If it’s a good fit for our buyer pool, we’ll give you a free preliminary valuation.

If that’s good to go, we’ll start our vetting process. That’s when we’ll dig into the nuts and bolts of your business to make sure all your financial information is ready and accurate.

At the end of the vetting process, you’ll be presented with a tailored valuation based on your business’ unique factors. If you decide to accept the final valuation, you’ll be listed on our site the following Monday.

Once your business is live, we take care of the marketing for you. Not only do you get a dedicated business listing page, but your business also goes out to our massive email list the week it goes live.

We’ll also try to drum up buyer interest and visibility for your business through a variety of marketing strategies, which may include rifle emails, seller interviews, and a feature in our weekly newsletter.

As one of our marketplace sellers, you’ll be working with a dedicated sales team who can introduce your business to potential buyers, set up buyer-seller phone calls, help you with negotiations, and help you navigate the sales process.

We require all of our buyers to verify their IDs and show proof of funds before they’re allowed to unlock businesses on our platform, protecting your sensitive information and eliminating the risk of a buyer not having the funds to purchase your business.

After you agree on an offer for your business, our dedicated migrations professionals will help you migrate your assets.

If the idea of a hassle-free sale sounds good to you, submit your business for sale today, or schedule a call with one of our business analysts to find out more about selling your small business.

Submit Your Business For Sale

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