It’s human nature to want to save money — and certainly an Iowa norm! Many business owners field direct buyer inquiries and are tempted to navigate the sale process without professional representation. When it works, that’s a great deal! But after two decades in business acquisition financing, I’ve experienced that it rarely does. Here’s why:
• Unclear Business Valuation: Without representation, most sellers don’t have an accurate sense of what their business is worth. Direct buyers are well aware of this and will try to leverage it to their advantage.
• Limited Market Insight: Selling a business isn’t something you do every day. Sellers often aren’t familiar with current market trends, valuation multiples, financing norms, or standard deal structures — putting them at a disadvantage when negotiating terms.
• Confidentiality Risks: Maintaining confidentiality during a sale is crucial to protect your employees, customers, vendors, and business reputation. When working directly with buyers, it’s much harder to control the flow of sensitive information. A business broker acts as a buffer and ensures confidentiality agreements are in place before any details are shared.
• Emotional Transactions: These are personal, often emotional decisions. Direct communication between buyer and seller can quickly become strained. What starts as normal negotiating can escalate without a neutral third party to manage expectations and filter conversations.
While hiring a business broker involves a fee, it typically results in a higher sales price, better deal terms, and a greater likelihood of closing the transaction! And remember — brokers are only paid when you get paid, at closing. Their interests are directly aligned with yours.
If you’re considering selling your business, it’s worth a conversation to understand your options.
