A business broker and a direct sale to us both get a small service business sold, and the difference is mostly about who does five jobs: pricing it, finding and screening a buyer, keeping the sale confidential, assembling the file a buyer will demand, and running the deal to closing. A broker does those jobs for a fee. Selling direct means someone else does them, or nobody does.
| A business broker | Selling directly to us | |
|---|---|---|
| Price | A broker’s marketing reach can put the business in front of more buyers than an owner can find alone, which can lift what a wider pool is willing to pay, though the fee comes out of whatever that reach adds. | One offer, priced on seller’s discretionary earnings and the add-backs the books support, with no wider marketing process behind it. |
| Speed | A formal process: valuation, a marketing package, buyer outreach, signed non-disclosure agreements before financials go out, then a letter of intent. That runs months before a signed LOI on most small deals. | We already know how we buy. No marketing period, no waiting on outreach to produce a buyer. |
| Fees | The broker fee on a small deal often runs ten percent of the sale price, so on a $500,000 sale that is roughly $50,000 to a broker who prices it, markets it, screens buyers and runs the deal to closing. | No broker fee. The price in the letter of intent is the number the seller nets before debt payoff, taxes, and the seller’s own attorney and CPA. |
| Certainty | A broker screens buyers for financing and seriousness before introducing them to the owner, which cuts down on financial disclosure that goes nowhere. | We qualify ourselves. There is one buyer to vet, not a pool of unknown ones. |
| Who does the work | The broker prices the business, builds the marketing package, screens and negotiates with buyers, and coordinates the paperwork to closing, which is what the fee buys. | The seller still needs an attorney to draft or review the purchase agreement and a CPA for the tax side, the same as with a broker. What a broker would otherwise do happens between the seller and us directly. |
Where a broker earns the fee
A broker’s fee buys five specific jobs: a valuation grounded in comparable deal data an individual owner usually cannot see, confidential marketing that reaches buyers an owner would never find alone, screening those buyers for financing and seriousness before the owner’s financials go out, negotiating price and terms, and running the file from letter of intent to closing. The situation where paying it is the cheaper answer is a business that needs a buyer pool wider than an owner’s own network to find: one that depends on a buyer who can qualify for SBA financing, or an industry where the realistic buyers are competitors and private equity groups an owner has no direct way to reach without exposing that the business is for sale. There, a broker’s confidential, screened marketing process can net more after the fee than a smaller, self-found pool of buyers would net before one.
Where selling direct wins
Selling directly skips the fee and the marketing period entirely, which fits an owner who already knows their buyer, an employee, a competitor, a supplier or a family member, a straightforward case where a broker’s reach is not the constraint. It also fits an owner selling to us: we already know how we value a service business and how we run the deal, so there is no marketing package to build and no outreach to wait on. The seller still needs their own attorney and CPA either way; what changes is whether a third party is also pricing, marketing and screening in between.
Thinking about selling a service business?
See what we look at first, how we value a service company, and the ways the price can be paid.
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