What Are The Pros And Cons Of Selling A Business For Sale By Owner?

Comments & Replies: 2     Views: 8063     Posted By: Joe Ranieri  Joe Ranieri, Business Broker: LA, Orange County Areas

What are the Pros & Cons of selling a business yourself? I get asked this question all the time and would like to share with other Intermediaries on BizBen all the angles of business owners taking the initiative and selling their own business.

Topics: Business Brokerage, Selling A Business     Tags: for sale by owner, selling a business



I usually qualify a seller before I go out and meet with them. I ask the seller some questions to make sure they understand that I only take exclusive listings, so neither of us end up wasting our time. Once in a while, and more often earlier in my career, a seller will tell me, "I don't want to do an exclusive listing, only open listing, because maybe I ll be able to sell it myself." I never try to "hard sell" them or make the potential seller feel like they are wrong, because I was once a retail business owner, and so I can understand where they are coming from. I have sold hundreds of businesses and a seller may have only been involved in 2-3 transactions, if that, and so aside from saving money on commission, they may not know of the pitfalls that come along with that. I've learned that if you treat the potential seller with respect, and they do try selling it themselves, and it doesn't work out, they will come back to you when they do end up listing it for sell.

PROS

The Commission

Obviously, saving money on the commission is the number one reason why most sellers end up trying to sell it themselves. Who doesn't want to walk away with more money in their pocket? It's understandable.

Flexibility

One of the benefits of selling the business yourself is that you are not obligated to be with one business broker for a term of up to six months. There is no intermediary, and so you can sell the business, in your own words, to every potential buyer and explain why they should by it.

Control

If you are selling yourself, you don t have to give up the reigns to someone you don t know. An owner who sells it themselves, knows exactly the type of marketing being used, who inquired about their business, and directly what is the reaction to the market their business has.


CONS

Exposure

Many of the listings in my inventory feed off themselves, as an example, they come in looking at a 5-day coffee shop, realize it s not for them, and end up looking at a deli.

Confidentiality

This may be why many opt to list with a broker rather than sell it themselves. It's sad, but true, that many businesses for sell do not end up selling, and so it s important to have as few key people as possible know it s on the auction block. Meeting with buyers off site is essential, because an owner doesn t want someone coming into their business and saying, "hey is this the place to sale?" in front of employees and customers.

Getting The Deal Closed

I could say limiting liability, because the broker has all the correct forms and knows the timeline in which they are executed, but I find the greatest benefit a broker has in a transaction is solving problems that occur throughout the transaction. The broker often acts as the driving force during the transaction and keeps things moving, because the longer a transaction takes, the more likely the deal doesn't get done.


  Helpful Resources To Assist In Selling And Buying California Businesses
William F. Ziprick, Attorney: Legal Services For Buyers And Sellers

Through creative problem solving, attention to detail, accessibility, & understanding that unnecessary delay is often a deal killer, I work closely with my clients and other professionals to consistently achieve a high rate of closings. Office: 909-255-8353, Cell: 509-951-7230.

Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Helen Yoo, New Century Escrow - Escrow Services In Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Shalonda Chappel: Escrow & Bulk Sale Services - Southern California

Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.

Michael Davidson, Business Broker - Southern California

Los Angeles Business Broker providing M&A quality services for Small Business Owners. We leverage our technology and expertise to Simplify & Expedite the Business Sales Process. Matching the right buyer with the right business is how we define success.

Peter Siegel, MBA: Business Purchase Financing Solutions

Niche business purchase financing advisory and loan placement services with SBA and Non-SBA Financing, Retirement Fund Rollover Solutions, Combo Financing Packages. To get professionally pre-qualified or more information on the ProBuy/ProSell Programs: 925-785-3118.

Chuck Post: Laundry Buyer Representation, Consulting, Due Diligence

32 years experience in the laundry industry, specializing in assisting laundry buyers with buying or starting up, re-tooling, laundries in Southern CA. Laundry buyer representation, consulting, due-diligence, lease negotiations, laundry valuations. Call 619-227-5711 (Cell).

Jim Thomas: Broker Specialist, Consultant - Fitness & Gym Industry

Jim Thomas is the well-known founder and president of Fitness Management USA, Inc., a management consulting and brokerage firm specializing in the fitness, health club and sports industry. He has over 25 years of experience owning, operating and managing clubs of all sizes.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Thinking About Selling A Small Business? Know These 8 Factors That Matter

The likelihood of selling a business is often determined by external factors in the marketplace. Here are eight influences on how easy, or difficult it might be when selling a small California business. Peter Siegel at 925-785-3118 (BizBen ProSell Program) explains these factors for owner/sellers.

Purchase A Small Business With Limited Or No Cash: Financing Tips For Buyers

Purchasing a business with no money down can be difficult, but not impossible. Financing a business purchase or down payment can often be accomplished with these strategies offered from Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy & ProSell Program Advisor with BizBen) in this post.

Getting An SBA Loan To Buy A Small Business: Dispelling Some Major Myths

When seeking SBA loan financing many potential business buyers have wrong information about the process of securing the best financing to buy a business. Peter Siegel, MBA (at 925-785-3118) a business purchase financing expert delves into the myths and facts regarding SBA loan financing.

Business Purchase Financing Expert Peter Siegel - Tips On Proving Cash Flow

What are the actual "provable" adjusted net earnings (cash flow) of a small to mid-sized business being purchased? Buyers need to look carefully at all financial info for the "real" adjusted net income/cash flow. Peter Siegel, MBA (BizBen ProBuy & ProSell Lead Facilitator) at 925-785-3118 explains.

Business Purchase Financing: SBA Loans & Non SBA Financing Solution Services

I provide niche business purchase financial advisory and loan placement services with SBA and Non-SBA Financing, Retirement Fund Rollover Solutions, Combo Financing Packages, etc. To get more information about getting Pre-Qualified & more info on the ProBuy/ProSell Programs: 925-785-3118 Direct.

Business Seller Mistakes Near The Close Of Escrow Can Tank A Deal To Sell

Let's be honest, typically it takes a while (6 months to a year) to sell a business, from listing to close of escrow, and so it's common that many sellers are anxious as the close of escrow nears with a buyer. Joe Ranieri (Business Broker) examines common seller mistakes owners should stay clear of.

Going Behind A Brokers Back: How Does A Broker Protect Themself?

What are some ways a broker can prevent a buyer and seller from doing a deal behind their back and what to do about it if it happens? Joe Ranieri (Orange County Business Broker) discusses ways a business broker or agent can protect themselves from buyers and sellers trying to circumvent them.

BizBen Podcast & Webinar: Business Purchase Financing And SBA Loan Options

Ever wonder what is involved in obtaining business purchase financing to buy a business or franchise? Peter Siegel, MBA who has over 25 years advising on all types of financing for business buyers in this BizBen Podcast & Webinar - SBA loans, Non-SBA Financing, Alternative Financing Sources.


Escrow Services From Helen Yoo New Century Escrow
Bill Ziprick Legal Advise
Escrow Town And Country Southern California
Escrow Services Diane Boudreau-Tschetter
Facebook
Twitter
Linkedin
Vlogs and Podcasts
BizBen ProSell Program
BizBen Blogs And Articles
Business For Sale California Stats
BizBen ProBuy Program
New Postings Reports On BizBen Sign Up


BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2020, All Rights Reserved



Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Deposits With Business Purchase Agreements: How Much? Structure? Refunda...
Read More News
Due Diligence Checklist: 10 Key Items To Investigate When Buying Busines...
Read More News