Selling your company without a broker: what you would take on, and where it breaks down

Yes, you can, and here is the honest trade-off

Yes. Nothing requires you to use a broker or M&A advisor, and some owners sell successfully on their own, usually to a buyer they already know. The trade-off is that you take on every job an advisor would do, from valuing the company and finding buyers to keeping the sale confidential, negotiating structure and managing due diligence, while still running the business. Where self-run sales tend to break down is competition, confidentiality and the owner's own attention, and those are also where most of the value in a sale is won or lost.

I founded MDR & Associates and have been selling Texas companies since 2008. I will be upfront that I have a point of view here. But owners deserve a clear picture of the work, so this guide lists it plainly and tells you which parts you can do well yourself and when it makes sense to stop and bring someone in.

The jobs you would be taking on

A sale is not one task but a sequence of them, each with its own skills. Seeing the whole list in one place is the best way to decide whether you have the time and the temperament for it.

Most owners underestimate the middle of the list. Finding one interested party is often easy. Finding several qualified buyers, keeping them moving on a common timeline and comparing their offers on structure as well as price is where the hours go.

Then there is the calendar. Our average from listing to closing is three to six months, and due diligence alone usually runs 30 to 90 days depending on the size of the business. During that time buyers request documents, ask follow-up questions and expect quick answers, and every one of those requests lands on your desk alongside the work of running the company.

• Setting a defensible asking price and supporting it with normalized financials
• Preparing a confidential summary and a detailed information package
• Identifying likely buyers and reaching them without exposing the company
• Screening buyers for confidentiality and financial ability to close
• Hosting buyer meetings and answering a steady stream of questions
• Negotiating letters of intent on price, structure and your transition
• Managing due diligence and coordinating attorneys, CPAs and lenders through closing

Where owners do well on their own

Owners are the best authority on their own business. You know the customers, the history, the competitive advantages and the quirks better than anyone, and that knowledge is the heart of any good marketing package. You can also do much of the preparation without help: gathering three years of financial statements and tax returns, documenting owner perks and one-time expenses, writing down systems and building an organizational chart.

A self-run sale also tends to work when the buyer is already identified and the relationship is strong, for example a long-time manager, a family member or a partner. Even then, you will need your own attorney and CPA, and you should know what the business is worth before you agree on a number. The U.S. Small Business Administration's guidance on selling a business makes the same point: set a value before you market the company, and have the sales agreement reviewed by an attorney.

Where self-run sales usually break down

The first breaking point is competition. A single buyer has no reason to pay more than the minimum you will accept. Without a way to reach several qualified buyers at once, you are negotiating against yourself. We offer a company first to our database of qualified individual buyers, buyer groups and private equity groups, which is a large part of why more than half of our listings go under contract before they are ever posted publicly.

The second is confidentiality. An owner contacting competitors or posting a listing is easy to recognize, and word that a company is for sale travels quickly to employees, customers and vendors. A third party can market the business blind and release details only to buyers who have signed a confidentiality agreement and shown they can finance the purchase.

The third is attention. Owners who run a sale themselves tend to lose focus on operations, and buyers price trailing results. A soft quarter during negotiations shows up directly in the offers, and sometimes in a price reduction during diligence.

• Only one buyer, so no pressure on price or terms
• Leaks that unsettle staff and customers
• Unqualified buyers who waste months before failing to get financing
• Operations slipping while the owner negotiates
• No buffer between the owner and the buyer when talks get difficult

The negotiation problem nobody warns you about

Selling your own company is emotional in a way that selling equipment is not. You built it, and a buyer's questions about weaknesses can feel personal. When you negotiate directly, every disagreement about price, an earnout or your role after closing happens between you and the person you may be working for during the transition. That relationship matters, and it is easy to damage.

An advisor acts as a buffer. Hard messages about price and terms pass through someone else, which keeps the working relationship intact and gives you time to think before you respond. We also negotiate with several buyers at once and work to avoid the back-and-forth that stalls deals. If an offer has already arrived, read what to do when someone offers to buy your business before you reply.

Deal structure is where do-it-yourself sellers lose the most

Headline price gets the attention, but structure decides what you keep. How much is paid in cash at closing, how much is a note you are financing, how much depends on future performance under the new owner, and how long you are required to stay all change the real value of an offer. Two offers with the same price can be worlds apart.

Tax structure matters as well. In an asset sale, IRS guidance treats the sale of a business as a sale of its individual assets, and the buyer and seller each report how the price is allocated among them. That allocation affects your tax bill, so talk to a CPA before you agree to terms. I outline the Texas-specific points in the tax and paperwork details of selling a company in Texas.

Selling to a manager, partner or family member

The strongest case for a self-run sale is an insider buyer: a manager who has run operations for years, a minority partner or a son or daughter. These buyers already know the business, so marketing and confidentiality matter less. What remains hard is the money and the relationship. Insiders often cannot pay the full price in cash at closing, which pushes the seller toward financing part of the deal and waiting years to be paid in full.

That makes the terms more important, not less. Agree on value using an outside view rather than a number that feels fair at the kitchen table, put the payment schedule and what happens if payments stop in writing, and have each side represented by its own attorney. An installment arrangement also has tax consequences, since the IRS generally taxes the gain from an installment sale as payments are received, so plan it with your CPA. If the business is owned with a partner and there is no written buyout agreement, sort that out first.

Signals that it is time to bring in help

You do not have to decide everything on day one. Many owners start preparing on their own and bring in an advisor when one of these signals appears. The earlier you do, the more options you keep, because some mistakes, such as signing an exclusive letter of intent with the only buyer, cannot be undone.

• A buyer asks for exclusivity before you know what the business is worth
• You cannot name more than one or two realistic buyers
• Employees or customers are starting to ask questions
• Results slip because you are spending your time on the sale
• Offers include earnouts, seller notes or rollover equity you do not fully understand
• Due diligence requests are piling up faster than you can answer them

If you go it alone anyway

If you decide to sell on your own, protect yourself. Hire an experienced M&A attorney before you sign anything, including a letter of intent. Bring your CPA in early on structure and taxes. Require a signed confidentiality agreement and proof of funds or financing before you share detailed numbers. Keep running the business as if no sale were happening, and resist any deadline a buyer sets to discourage you from getting advice.

It also helps to understand what you would pay if you did hire help, so you can make the comparison with real numbers rather than assumptions. I explain how advisors are paid in what it costs to sell a company through an M&A advisor, and how to vet one in questions to ask a business broker before you sign.

A no-cost second opinion before you decide

Whether you hire anyone or not, knowing what the company is worth is the foundation of any sale. Our discovery meeting is complimentary and lasts about an hour, at our Frisco office or by phone. A partner reviews three years of financials with you and gives you a free low-to-high opinion of value, along with a candid view of who the likely buyers are.

Some owners use that range to negotiate with a buyer they already have. Others decide a competitive process is worth it. Our fee is 100 percent performance-based, so if we are engaged and no transaction closes, nothing is owed. We work with owners across Dallas–Fort Worth, Austin, Houston and San Antonio.

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