Yes. You can sell your business without a broker. You can sell directly to a buyer who wants to own the business and run it. A broker is a choice. A broker is not a legal requirement. The right route depends on your business. The right route also depends on what you value most.
The short version
The broker route and the direct route differ in three main ways.
- Cost. A broker charges the seller a success fee at closing. A direct buyer at RockHaven charges the seller no fee.
- Confidentiality. A broker markets your business to many people. A direct sale keeps the talks inside one room.
- Reach. A broker can put your business in front of a wide pool of buyers. A direct sale works with one buyer at a time.
A broker reaches more buyers at once. That reach can help some businesses find a higher price. A direct sale reaches one buyer at a time. That limit is also the source of its privacy. Neither route is right for every owner. The sections below walk through each route in plain terms.
What a broker actually does
A good broker does real work. Brokers build a listing from your financials. Brokers write a summary that hides your name at first. Brokers then market the listing to their pool of buyers. Brokers screen the early calls for you. Brokers also keep the process moving when talks stall.
That work has value. It saves the owner time during a long sale process.
In exchange the seller pays a success fee at closing. The fee is commonly around 10 percent of the first million of price. The percentage slides down on larger deals. That structure is the common market arrangement for small business sales.
What the broker route costs you
The fee comes out of the price the seller receives. On a one million dollar sale the fee can be around one hundred thousand dollars. That money does not go to the owner. That money does not stay in the business.
A public listing creates a second cost. Your business gets shown to strangers. A blind listing hides your name at first. Details still travel once buyers start asking questions. Staff may hear that the business is for sale. Customers may hear it too. Competitors may hear it as well. Some owners accept that risk without concern. Other owners will not accept it at any price.
What a direct sale looks like
We are the buyer, not a broker. A direct sale starts with one confidential conversation. You talk with the people who would own the business.
At RockHaven the process has four steps.
- One conversation. You share the basics of the business. We tell you plainly whether it fits what we buy.
- A valuation from your real numbers. We price the business from its cash flow. We show you the math behind the number.
- Terms in writing. You get a written offer with a price. The offer also states the terms and the timeline.
- A close with your own advisors. Your attorney and your CPA review the paperwork. Both sides sign and the sale closes.
Once terms are agreed a close takes four to eight weeks. Sellers are charged no fees, ever. If we buy your business you do not pay us a fee to do it. Everything stays confidential from the first call to the close.
What we buy. We buy businesses with revenue from $1M to $10M. We look for cash flow of $300K or more. That cash flow must be provable from tax returns. If your business fits that range a direct talk costs you nothing.
When a broker is the right call
A broker is the right call in some cases.
Some businesses need a wide auction to find their price. The value may sit with one rare buyer type. Competition has to be created before that price shows up. A broker with a deep pool can create that competition.
Some owners want an intermediary on every call. That buffer has real value during hard talks. A good broker earns the fee in that role.
Some sectors pay far above the rest for one kind of buyer. Finding that buyer can take a long marketed search. A broker who knows that sector can be worth the cost.
When direct fits better
A direct sale fits a business with provable cash flow. It fits a business in the $1M to $10M revenue range. It also fits an owner who wants a quiet process.
Confidentiality matters most to many owners. Speed matters too once the decision is made. A direct sale protects the first point. A direct sale also moves faster on the second point.
Many smaller businesses sell to an operator buyer in the end. A brokered auction adds little when that is the likely buyer. One honest conversation can reach the same result. The owner keeps the fee a broker would have taken.
None of this makes a direct offer right by default. Judge any offer on its math. Walk away from any offer that does not work for you.
FAQ
Who pays the broker in a normal sale?
The seller pays the broker in a normal sale. The fee is set in the listing agreement. The fee is paid at closing from the sale proceeds.
Is it legal to sell a business without a broker?
Yes. Owners sell directly to buyers all the time. Your own attorney and CPA should still review the paperwork before you sign.
Will a direct buyer pay a fair price?
A fair price comes from the cash flow math. Ask any buyer to show how the offer was built. You can walk away from any offer that does not work for you.
Does RockHaven work with my broker if I have one?
Yes. Brokers are welcome at RockHaven. Their fee is protected. We respond to intermediaries within two business days.