Going Solo: The Facts About Selling Your Business Independently
You have options when selling your business. Many business owners decide to rely on professional brokers, while others decide to market and sell their companies themselves. Independent sellers are called FSBO (For-Sale-By-Owner) sellers, and they represent a growing portion of business owners who list establishments for sale.
Unlike previous generations, today’s sellers can access the Internet and other technology-based resources to learn how to sell and effectively market their businesses to potential buyers.
Why choose the FSBO method of selling a business?
- Many sellers believe they are the best person to represent their company. They are the most familiar with their company’s strengths and limitations, and therefore best qualified to present their business to potential buyers. They enjoy talking about their business and feel confident they can generate interest in the marketplace. In addition, most small business owners are born entrepreneurs and expect to apply the same hard work and common sense to maximize the price and minimize the time the company sits on the market.
- Sellers can easily leverage online information and business-for-sale websites. Online business-for-sale websites, such as BizBuySell.com, not only help sellers to market their business to potential buyers, but also provide education and valuation resources to help them prepare and sell their business.
- FSBO sellers do not pay broker commission. For obvious reasons, many sellers choose to take on the responsibility of selling their business themselves and avoid paying a broker commission. This mean handling the marketing, prospecting of qualified buyers, as well as the negotiation process themselves. Yet, many business owners are not comfortable handling these responsibilities - nor do they have the experience or the available time.
- FSBO sellers remain intimately involved in the sales process. Many sellers consider this a huge advantage because it keeps them in the loop with buyer interest and helps them gauge the expectations against market realities. Business owners with a “hands-on” leadership style may prefer this level of involvement rather than work through a broker.
Risks of Choosing the FSBO Method:
- Selling a business is a specialized transaction and requires a certain level of expertise. To be done effectively, owners need to actively seek out all the necessary resources and religiously integrate them into their sales strategy. Moreover, FSBO sellers may find it beneficial to consult with their attorney or accountant for reassurance and confidence throughout the transaction.
- Selling a business can be emotionally taxing. Selling a business that an owner has spent years building can be a very emotionally difficult process. Negotiations can become tense and stressful and the owner may find it difficult to make wise decisions. In contrast, a broker can create an often much-needed buffer between buyer and seller and offer an objective perspective.
- Selling a business may interfere with running the business. Selling a business, including taking a business to market, finding qualified buyers, and managing the negation process can be extremely time-consuming and can interfere with running the business itself. Lack of attention to running the business can results in a loss of customers and revenue, which is one of the last things an owner wants when attempting to sell their business for the highest value.
- Finding the right buyers may be challenging. Unless you already have a buyer in mind, such as a family member, competitor, supplier or employee, identifying a qualified buyer can be difficult. You may find yourself wasting valuable time and energy with buyer prospects such as tire-kickers or would-be small business owners that lack the ability, means or desire to actually close the deal. In contrast, experienced brokers are very skilled at quickly identifying buyers who are qualified buyers and serious about purchasing your business.
With today’s technology, owners are now able to market their businesses for sale like never before. Online business-for-sale websites, such as BizBuySell, offer a pre-existing conduit that links sellers directly with buyers. FSBO listings are ideal for owners who feel they can effectively facilitate the sale of their business and manage their business at the same time. Yet, a business sale is a specialized transaction that requires a certain level of expertise as well as an objective perspective. While some owners may feel confident in their ability to go solo with a FSBO listing, others may feel more comfortable handing off the responsibility to an experienced business broker.