Yes, it is possible to sell a business without a broker, just as it is possible to sue someone without the help of an attorney. Although a broker is not always necessary, there are instances when a broker may be useful and other times when you can manage a sale without the help of a broker.

We recommend using a broker in these situations:

  • You have never sold a business before.
  • You would like to maximize the purchase price of your business.
  • You would like to sell your business as quickly as possible.
  • You do not want the sale of the business to distract you from running your business.
  • You are working full time in the business and cannot invest a significant amount of time in the sale process.
  • You have been approached by a potential buyer, either with or without an offer.

Here are a few situations in which we believe it is not necessary to hire a broker:

  • You have already negotiated a price with a buyer, and you are not concerned about maximizing the price. While you may not need a full-service broker in a case like this, we still recommend hiring an attorney or a broker to assist with the closing .
  • You are selling your business to an insider, such as a family member or an employee. Our recommendation is to hire an attorney in this case.
  • You are a serial entrepreneur and have sold multiple businesses before.

Which is the right way to sell your company: using a fishing rod or a rifle?

Selling a business with a fishing rod involves casting a line, dropping the lure, and waiting. In the real world, this involves confidentially marketing your business for sale using various media: online media, trade publications, newspapers, and others. This is a passive approach, in which you place the advertisement, then sit and wait (visualize your average fisherman patiently waiting). Selling a business with a rifle, on the other hand, involves knowing exactly who your targets are, hunting them down, confronting them directly, and firing an accurate shot right where you need to. Selling a business with a rifle is an active, involved process (think costlier and more time-consuming) that requires planning, discipline, accuracy and stealth (confidentiality). In some cases, you can use both. Note that you also tend to fish for smaller creatures (e.g., bass, salmon, tuna, crappie, trout), while you hunt for larger creatures (e.g., deer, elk, bison, moose). This is the same in the business world.

“Fishing” is for small businesses; “hunting” is for mid-sized businesses

Let me first define a small business and a mid-sized business:

  • Small business - Annual revenue: less than $10 million; annual cash flow /profit: less than $1 million
  • Mid-sized business - Annual revenue: $10 million to $100 million; annual cash flow/profit: $1 million to $10 million

How is my lease handled when I sell my business?

The lease is an integral part of the sale process. The landlord or lease can be one of the two biggest deal killers when selling your business; the other being your financials. It certainly pays to properly handle the assignment or transfer of your lease.

When should I contact my landlord and let him know I am selling?

The earlier the better. Landlords respect owners/tenants who are up-front and give them advance notice that they are selling. I see many sellers spring the news on the landlord three days before closing , only to have the landlord refuse the transfer of the lease. Contacting the landlord up-front will reduce this concern and will also ensure buyers that the landlord is flexible and agrees with the game plan.

Doesn’t the landlord have to approve the transfer of the lease to the buyer?

No, not necessarily. Be sure to read your lease as your lease should address this issue. The law in most states address assignments. Most state law says that the landlord cannot “unreasonably withhold the assignment of the lease”. What does “unreasonably mean”? That’s the magic $25,000 question, or depending on how expensive your attorneys are. If landlords want to, they can put up a fight to keep you from transferring your lease. The reasons may vary. It certainly pays to make sure the landlord and you are one the same page before you invest a lot of time and effort in selling your business. It doesn’t pay to litigate this question. It is best to reach an agreement and move forward with you both on the same page.

What is an assignment of the lease?

With an assignment, the lease is

Selling a business is a complicated process. Even if you hire brokers like us to sell your business, it’s still imperative for you to understand the process before, during and after the sale. You can’t simply hire us or another broker and blindly let us handle everything.

As an owner, you have a tremendous amount of responsibility to participate in the process regardless of who you hire to help you out. With almost two decades of experience in helping entrepreneurs sell their businesses, I learned that most of them had been thinking about actually selling their business, but never thought about preparing for the sale.

Is this book written for you?

If your business has a revenue of less than $25 million, then this book is for you. Whether you’re selling your business now or you’ve been thinking about selling in the next five years, you will gain useful and actionable insights from this book.

What will you get from this book?

Sell your business without stress. The process of selling a business is complex and can be extremely stressful, especially if not handled correctly. On this book, I explain the entire sale process in simpler terms to help you understand what happened before, during and after the sale.

Anticipating what’s going to happen, e.g., how you should qualify buyers or how you should choose the right seller financing, etc., can definitely reduce, if not totally eliminate, stress in the process.

Be more confident in selling your business. The

Adjusting Financial Statements - Overview

Most business owners minimize taxable income by eliminating expenses that are not directly related to the business’s operations. These expenses might cover personal auto, insurance, cellphone, child care, medical care, travel, among others. For this reason, adjusting the financial statements by “adding back” these expenses is often necessary to show potential owners the actual cash flow available.

Adjusting the financials allows us to compare your business to other businesses using seller’s discretionary earnings (SDE), also referred to as seller’s discretionary cash flow (SDCF), adjusted cash flow, owner benefit, recast earnings or normalized earnings.

Among all these terms, SDE is the most common metric used by business brokers and many other professionals, including buyers.

Seller’s Discretionary Earnings or SDE is defined by the International Business Broker’s Association (IBBA) as:
  • Pre-tax net income (the bottom line profit that appears on profit and loss statements); plus

  • Owner’s compensation paid to all owners, less the cost needed to replace a second or third owner; plus

  • Interest expense ; plus

  • Depreciation and amortization ; plus

  • Discretionary expenses (auto, cellphone, meals, entertainment, travel, etc.); plus

  • Adjustments for extraordinary , non-operating revenue or expenses , non-recurring expenses or revenue (lawsuit, flood damage, etc.)


Pre-Tax Net Income


Owner's Compensation