Selling a Business Without a Broker: Advantages and Disadvantages of Direct Sales

Selling a Business Without a Broker: Pros and Cons of Direct Sales

The sale of a business is one of the most complex and emotional processes in the business world. Many entrepreneurs face the fundamental question: Should I sell my business independently or hire a professional M&A advisor? In this article, we explore the possibilities of direct sales without a broker and transparently outline the advantages and disadvantages of this decision.

Why Entrepreneurs Consider Direct Sales

The reasons why entrepreneurs consider selling without a broker are diverse:

Cost Savings: Avoidance of consulting fees and success commissions
Full Control: Direct influence over the entire sales process
Confidentiality: No additional parties privy to sensitive company details
Personal Network: Existing potential buyers within one’s own circle
Manageable Business Size: The process appears feasible for smaller sole proprietorships or LLCs

Practical Tip: An honest self-assessment should precede the decision for or against an advisor: Do you have sufficient time, experience, and emotional distance for the sales process?

The Direct Sales Process Step by Step

Those who want to sell their business without a broker should prepare for a structured process:

1. Preparation and Valuation

Conduct a Business Valuation: Use standard methods such as the multiplier method or commission an external valuation
Prepare Company Documents: Create a structured documentation with all relevant information
Compile a Sales Prospectus: Develop a professional sales brochure
Define Sales Strategy: Decide whether to proceed openly or discreetly

Cost Factor: A professional business valuation by an external service provider costs between €2,000 and €10,000 depending on company size.

2. Buyer Search and Marketing

Without an M&A advisor, you must independently find potential buyers:

Activate Personal Network: Competitors, suppliers, customers, or employees
Use Online Platforms: Business exchanges such as nexxt-change or DUB
Industry-Specific Forums: Associations and professional organizations
Social Media Channels: XING, LinkedIn, or industry-specific groups
Regional Marketing: Chambers of Commerce, trade chambers, regional economic development agencies

Practical Tip: When searching for a successor instead of a founder, founder networks and universities can also be valuable contacts.

3. Contact Management and Initial Meetings

Set Up Interested Party Management: Document all inquiries and conversations
Confidentiality Agreements: Have NDAs signed before sharing detailed information
Credibility Check: Verify the creditworthiness and seriousness of interested parties
Conduct Initial Meetings: Present your company convincingly but realistically

Important: Be sure to identify untrustworthy potential buyers early to avoid wasting time.

4. Due Diligence and Negotiations

Prepare Data Room: Provide all relevant documents in a structured manner
Support Due Diligence Process: Answer questions and coordinate visits
Develop Negotiation Strategy: Define your minimum requirements and negotiation leeway
Negotiate Purchase Price: Be prepared for different price expectations

Cost Factor: Expect external consulting costs for lawyers and tax advisors ranging from €5,000 to €15,000, even if you do not hire an M&A advisor.

5. Contract Drafting and Closing

Draft Purchase Agreement: Be sure to obtain legal advice
Plan Handover: Define a clear transition period
Secure Financing: Verify the buyer’s financial capability or assist with purchase financing
Sign Contracts: Notarization is often required

Self-Marketing Strategies: How to Find Buyers?

The biggest challenge in direct sales is finding suitable interested parties. Here are some effective strategies:

Online Platforms for Business Sales

General Business Exchanges: nexxt-change, DUB, Unternehmensbörse
Industry Platforms: There are specialized platforms depending on the sector
Regional Offers: Chambers and economic development agencies often operate regional succession exchanges

Cost Factor: Using business exchanges costs between €0 and €500 per listing depending on the platform.

Marketing According to Industry Specifics

Different marketing strategies may be appropriate depending on the industry:

Craft Businesses: Guilds, trade associations, chambers of crafts (Selling a Craft Business)
E-Commerce: Specialized platforms for online shop sales
IT Companies: Tech communities, industry associations (Selling IT Service Companies)
Gastronomy: Gastronomy exchanges, trade magazines (Buying a Restaurant)

Geographic Marketing Strategies

The right sales approach can also depend on the region:

Large Cities: In Berlin, Hamburg, or North Rhine-Westphalia, specialized regional networks often exist
Rural Areas: In Thuringia or Brandenburg, involving local economic development agencies can be particularly important

Advantages and Disadvantages of Direct Business Sales

Advantages of Selling Without a Broker

Cost Savings: No commission of 3-7% of the sales price
Information Control: Full control over which information is shared, when, and with whom
Direct Contact: Immediate communication with potential buyers
Flexibility: Individual adaptation of the sales process
Personal Relationship: Opportunity to build a closer relationship with the buyer

Disadvantages of Self-Sale

Time Commitment: The sales process consumes significant management resources
Lack of Expertise: Negotiation disadvantages due to insufficient market knowledge
Emotional Involvement: Difficulty remaining objective
Reduced Reach: Fewer potential buyers than with professional marketing
Confidentiality Risks: Higher risk of information leaks
Lower Sales Price: Statistically often lower proceeds than with advisor involvement

Cost Comparison: Direct Sale vs. M&A Advisor

Cost Factor	Direct Sale	With M&A Advisor
Business Valuation	€2,000 - €10,000	Included in consulting fee
Sales Prospectus Creation	Own effort or €1,000 - €3,000	Included in consulting fee
Marketing Costs	€500 - €2,000	Included in consulting fee
Legal Advice	€5,000 - €15,000	€5,000 - €15,000
Tax Advice	€2,000 - €8,000	€2,000 - €8,000
Advisor Fee/Commission	€0	3-7% of sales price
Total Costs	€9,500 - €38,000	€7,000 - €23,000 + commission

Practical Tip: When calculating, also consider your own time investment and potential price differences in the sales proceeds.

When Does Selling Without a Broker Make Sense?

Self-sale can be the right choice under certain conditions:

Small Business Size: For small businesses with manageable complexity
Clear Successor: When a concrete buyer (e.g., employee, family member) is already identified
Industry Experience: If you have M&A experience in your sector
Sufficient Time: If you can manage the sales process alongside operational business
Local Market: For business models with a strong regional focus

Innovative Solution: AI-Supported Business Sales with Viaductus

At Viaductus, we are currently developing an innovative AI agent that will revolutionize the sales process specifically for small businesses. This solution combines the cost advantages of self-sale with the expertise of professional consulting—at significantly lower costs than traditional M&A advisors.

Our AI agent supports you with:

Automated business valuation according to industry standards
Creation of professional sales documents
Intelligent buyer matching algorithms
Structured negotiation management
Legally compliant contract drafting

Interested entrepreneurs can contact us now to benefit early from this forward-looking solution. Just get in touch!

Conclusion: Balanced Consideration

The decision for or against an M&A advisor should be well thought out. Direct sales can save significant costs but also involve risks and disadvantages. The following factors should influence your decision:

Complexity of your business
Available time alongside operational business
Personal sales and negotiation experience
Emotional attachment to the business
Desired sales timeframe
Target sales price

Regardless of whether you choose self-sale or an advisor: thorough preparation is key to a successful business sale.

Remember: Selling a business is a once-in-a-lifetime event for most entrepreneurs. Carefully weigh whether potential savings justify the increased risk.

For an initial non-binding assessment of your company’s value, you can use our online valuation calculator.