Should I Sell My Business Myself or Hire a Business Broker?

For many contractors, the first question after deciding to sell is whether to handle the sale themselves or retain a business broker or M&A adviser. An equally important question is when to bring an attorney and CPA into the process.

The better question may be: What team should I have around me before I ever talk seriously to a buyer?

Selling the Business Yourself

You can sell a business yourself, particularly when a credible buyer already exists — such as a key employee, family member, competitor, or another contractor that has approached you.

The advantages are straightforward. You may avoid a substantial brokerage commission, maintain direct control over negotiations, and use your own detailed knowledge of the company.

But there is a disadvantage contractors sometimes underestimate: you are emotionally attached to the business you are negotiating. When a buyer questions your margins, employees, equipment, customer concentration, or valuation, it can be difficult not to take the discussion personally.

Why Consider a Business Broker or M&A Adviser?

A strong intermediary creates separation between the seller and buyer. They can help protect confidentiality, screen and qualify prospective buyers, organize the flow of information, manage the sale process, and potentially create competition among multiple buyers.

The biggest potential advantage is not simply finding a buyer — it is discovering whether there is a better buyer, a better price, or a better transaction structure.

If someone approaches you with a $4 million offer, how do you know the company is worth $4 million? It might be worth less. It might be worth considerably more. A properly managed market process can help answer that question.

Not Every Broker Is the Right Broker

For a substantial electrical, plumbing, HVAC, mechanical, sewer, construction, or service contractor, the adviser should understand contractor transactions and the appropriate buyer universe.

Depending on the size and complexity of the company, the right professional may be a traditional business broker, a Certified Business Intermediary, or an M&A adviser.

Experience in your industry, transaction size, buyer network, confidentiality process, fee structure, references, and actual closing history should all be evaluated before signing an engagement.

When Should I Hire the Attorney?

Before you sign a Letter of Intent or other meaningful deal document.

You do not necessarily need an attorney billing you every month for two years while you prepare the company. But you should identify and engage a qualified transaction attorney early enough to review the important terms before you agree to them.

A Letter of Intent may appear simple, but it can establish critical economic and legal expectations: purchase price, asset versus equity structure, cash at closing, seller financing, earn-outs, retained equity, working capital, accounts receivable, debt, employment or consulting obligations, exclusivity, and restrictive covenants.

Do not negotiate all of those points, sign the document, and then ask an attorney to protect you afterward. By then, important negotiating leverage may already be gone.

Can the Business Broker Handle the Legal Work?

The broker and attorney have different jobs.

The broker or M&A adviser helps market the company, identify and qualify buyers, create competition, negotiate business terms, and manage the transaction process.

The attorney represents your legal interests and handles or reviews the legal documents and protections associated with the transaction.

A broker may recommend excellent attorneys, but the seller should interview and retain an attorney who represents the seller’s interests.

Don’t Forget the CPA or Transaction Tax Adviser

The highest purchase price is not automatically the best deal.

Taxes, purchase-price allocation, working capital, earn-outs, seller financing, retained equity, debt, and transaction structure can dramatically affect what the seller actually receives and the risks the seller retains.

A CPA or tax adviser experienced in business transactions should evaluate the financial and tax consequences before the final structure is agreed upon.

The BBC Seller Team

1. Broker / M&A Adviser — Market positioning, buyer identification, competition, business-term negotiation, confidentiality, and transaction management.
2. M&A / Business Transaction Attorney — LOI review, purchase agreement, representations and warranties, indemnification, restrictive covenants, retained equity, employment or consulting agreements, and legal protection.
3. CPA / Transaction Tax Adviser — Financial normalization, tax structure, purchase-price allocation, quality of earnings considerations, and determining what the seller actually nets.

When Selling It Yourself May Make Sense

If a longtime general manager or family member wants to buy the company and the broad economics are already understood, a full brokerage engagement may not always be necessary.

If a credible strategic buyer approaches the company directly, the owner may choose to hire an M&A adviser for valuation, negotiation, or limited transaction support rather than a full marketing engagement.

Even in a direct sale, however, the owner should independently determine whether the offer represents reasonable market value and should use qualified legal and tax advisers.

The BBC Principle

“Don’t assemble your transaction team after you’ve negotiated the transaction.”

Your advisers are most valuable before you agree to the terms you will eventually ask them to protect.

The broker should not make your legal decisions. The attorney should not be brought in simply to paper a deal that has already been negotiated. The CPA should not first learn about the transaction after the economic structure has been agreed upon.

Bring the team together early enough that the broker understands the market strategy, the CPA understands the financial and tax consequences, and the attorney understands what you are trying to accomplish personally and financially.

Then you — the owner — make the decisions.

The goal isn’t simply to find someone willing to buy your company. The goal is to create a transaction that protects the value you spent a lifetime building.