Can you sell your own business?

Bruce Swabb, CPA

It isn’t particularly hard at all, if you can devote the attention to meeting with potential buyers, you are satisfied with a potentially long listing period, or you can live with settling for a lower price for your business.  It is fairly rare for business owners to attempt to sell their own businesses.  This is a far cry from selling a home or even commercial real estate.  

I’ll outline 4 key things to consider:

Setting Market Price

A key factor in the length of time your business sits on the market is setting a reasonable price in relation to the potential investment return to a buyer.  Most business owners are shocked by the actual market value of their business.  If you are fortunate enough to attract serious prospective buyers, you will very quickly learn the price the market is willing to pay.  Consider a fee based business valuation in order to set a fair market price.  An unreasonable price will simply get your business ignored by serious buyers.

Getting Attention

There are a number of alternatives for telling the world your business is for sale.  The old classified ad approach has become a thing of the past due to the rapid decline in traditional newspaper readership.  We used to have great success marketing businesses in the Thursday edition of the Wall Street Journal, but we’ve come to the conclusion that it is no longer effective – and it is exorbitantly expensive.

Craigslist seems like a no-brainer - until you have to interact with hundreds of completely undercapitalized prospective buyers.  Craigslist is for selling your old camper top, not your business.

Another alternative is to place listings on the web with Loopnet, or other websites specifically created for buying and selling businesses such as BizBuySell or BizQuest.  These sites all charge a range of fees, but in all cases, to properly showcase your business and drive eyeballs to your listing, you will need to make an investment.  It isn't unreasonable to spend $1,000 per month to market your listing.

Much like MLS listing services, professional brokers have subscriptions to these sites that give them a far wider audience than the FSBO seller.  For instance, it is said that a FSBO listing is exposed to only 2% of Loopnet visitors.  Seems unfair, but you have to pay to play.


I don’t care who you are, a buyer will have leverage over you in negotiations.  In our experience, the buyer is looking at several potential investments and they are quick to move on.  Are you able to dispassionately negotiate a deal?  Will you stay clear headed enough to ensure key points are included in the deal?  It isn’t as easy as it seems!

Deal Structure and Due Diligence 

Make sure you clearly understand your legal and tax structure and your cost basis in the business.  There can be a huge difference in the tax bill depending on how the business sale is structured.  What is good for the buyer is often not the best answer for the seller.

Due diligence is intrusive. Any buyer will want to tear apart your books, talk to your employees and customers, and ferret out anything that could lead to liability once he or she takes over your business.  You may need to have an environmental or structural engineering study performed.  Most buyers want to see three years of financial information, including customer lists and rent rolls.  Needless to say, due diligence can be an exhaustive process and a big distraction if you are heavily involved in the day to day operation of your business.  It is particularly heartbreaking when you've busted your tail to meet a long list of information demands and a buyer pulls out of the deal because you were not prepared to explain every aspect of your business.  Buyers will have an option to kill the deal until they have completed this process.

No Shame in Calling for Help

The desire to avoid a broker’s commission in understandable, but keep in mind that professional help will more than pay for itself in generating more net dollars to you than the cost of the commission.  And a broker should handle most of the details of marketing and due diligence so you can keep running your business right up to the closing.  Up to 80% of FSBO's eventually get listed with a broker.

Now excuse me while I attempt to replace my air conditioner.  I’ve been watching a bunch of Youtube videos, and it looks like a cinch!