Every business owner is capable of selling their own company. But when it comes to this major financial event, owners should consider whether “for sale by owner” is a smart strategy.
The typical business owner is, by necessity, a good negotiator. They negotiate with vendors and customers on a regular basis. They certainly understand their business well and can talk about it intelligently with a potential buyer. They probably know several buyers in their industry who might be interested. So why not sell a business on your own.

• It’s not about negotiating ability. Most people will only sell a business once in their lifetime. Business Brokers and M&A Advisors do it every day! That experience is invaluable for avoiding common mistakes and maximizing net proceeds in a sale.
• Most business owners don’t realize they are leaving money on the table. For example, does the buyer receive the Accounts Receivable as part of the sale price? If so, how much? What level of inventory is fair to include in the price and what happens if it increases significantly between when the offer is signed and the deal closes? Will the buyer assume current liabilities as part of the price? How will the purchase price be allocated and what are the tax consequences to each party? These items will have a major impact on a seller’s NET proceeds.
• The Devil You Know. Many owners are scared to death by the idea of proactively marketing their business for sale. Understandably so, since it is a big unknown. So rather than confidentially approach multiple buyers they settle for a buyer that is the “devil they know”. This buyer is often a competitor that will not pay the best price or isn’t big enough or motivated enough. This buyer could be a family member or key employee who really understands the business but has limited financial wherewithal. Or perhaps a partner, who like the competitor will usually pay the least for the business. In every case the business owner is limiting their options and ignoring an enormous market of motivated, highly qualified and well-financed buyers.
• It’s a Numbers Game. When selling a business you want to quietly and confidentially talk to multiple buyers. The typical entrepreneur has a short list of possible buyers for their business, but Business Brokers have and M&A Advisors like Sunbelt have thousands of buyers in their databases. They can reach many more through confidential marketing. Proactive outreach to strategic buyers and Private Equity Groups will create even more interest.
• Time. Selling a business is time consuming. While your business is for sale it needs to be hitting on all cylinders. If your business suffers because you are trying to manage your business and sell your business at the same time, it is sure to cost you your time and your money.

As many entrepreneurs know, the obvious and “easiest” path is not always the best. In fact, when it comes to selling your business the strategy of For Sale by (Business) Owner is almost guaranteed to leave big money on the table.