It’s more normal for the buyer to produce the heads of terms, especially if you’re not using a broker. Service companies are the most popular type of business for sale, followed by food. Selling site BusinessTradeCentre has around 200 businesses for sale at any one time and gets around 8,000 unique visitors a month.

  • 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.
  • 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.
  • Toby Harper, founder and CEO of law firm Harper James, says the truism is that a business is only worth what someone is willing to pay for it.
  • This formula can be useful for valuing businesses that have a strong track record of generating cash flows, as it provides a way to estimate the present value of those cash flows.
  • Once you’ve found a legitimate buyer and have received an offer, it’s time to negotiate the sales price.

Broker fees vary, but many charge a 10-15% commission on the total price of the sale. Others ask for a non-refundable fee or retainer that can range from $10,000-$50,000, based on the listing price of your business. You can choose to sell your business entirely on your own, as many owners do. Or, you could act as a foreman to your sale, contracting out specific tasks for others to perform and choosing to take on the parts of the process that fit into your own unique skillset.

What Are the Steps for Valuing a Business for Sale?

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. 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. 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.

Specialises in bars, commercial property, digital businesses and service business. Retail is the most popular type of business for sale, followed by food. That said, Clinton Lee, a consultant who specialises in helping sell businesses, believes that all but the smallest businesses would benefit from using a reputable broker. After you agree on an offer for your business, our dedicated migrations professionals will help you migrate your assets.

…and you will need to find an accountant

Graeme and Ney were key to getting the deal to close.” – Mark Stapleton, PowerChem Technologies. They’ve heard about WordPress, its incredible popularity, excellent features and designs, and now they want to join the pack and build a WordPress website of their own. Most of all, be sure to take your time and do the paperwork properly, with the help of a lawyer and CPA where applicable. Paul is an outdoor enthusiast who enjoys fishing, hunting, riding motorbikes, Crossfit and an occasional craft beer.

One piece of information you should never divulge is any information about your customers. A generic sales report is one thing, but if the report includes the names of your customers it may invite undue attention crypto exchange vs trading platform on the people you do business with. Generally, if someone sees the ad for your business, they will sign an NDA and fill out various other forms to send to the business owner indicating their interest.

Determine the Value of Your Business

So, if you’ve ever wondered, “how do I sell my small business without a broker? A 130 page detailed book, including real world stories, on how to sell your middle market business for the best price. You will be immediately taken to a download page and will not be added to any mailing list. An LOI may also be preceded by a confidentiality agreement to keep the details of the sale private. You can also find Letter of Intent templates online, though I strongly recommend working with a lawyer to draft this document. Do they have the technical and managerial experience needed to make it work?

how to sell a small business without a broker

Once the deal is done, there are some forms required by the IRS (for an asset sale, which most small business transactions are). You’ll need to have a firm grasp of your business’s financial position over the past few years in order to establish its value properly. Plus, once negotiations start, your buyer will review those documents with their CPA. You want to make sure it’s easy for them to get the information they need and process your documents ahead of the sale. When you’re finished reading, you’ll have a good understanding of how business 💼 sales work and where to find advanced resources on specific parts of the process.

Advantages of Selling a Small Business Without a Broker

The attorneys for both buyer and seller will be negotiating the details of the Definitive Agreement with their clients. A Confidential Information Memorandum (CIM) is the primary marketing document that you will provide to interested buyers after they’ve signed an NDA. It should tell them enough to know if they’d like to move forward with the opportunity to buy your business without “giving away the farm,” so to speak.

how to sell a small business without a broker

And if you’re the type of person who says, “How do I sell my business privately? ” you’re also likely the type of person who isn’t afraid of a little research. Prospective buyers can be demanding when it comes to requesting information – and why shouldn’t they be?

How to Sell a Small Business Without a Broker: A Comprehensive Guide

You may want to consult with a lawyer to see which additional rules could apply. If you’re thinking about transitioning from your current business into another market and you’re considering acquiring a new company, Acquira has the resources to help. While the actual number that you’ll list as an asking price is largely dependent on what you think the company is worth, it’s a good idea to have a concrete number in mind. A broker would never put a company on the market until all of this information is ready and, as the seller, neither should you.