In 2025, you can watch a video or listen to a Podcast and come away with the impression that you can do most things yourself.  The following video provides instruction on how to make wine (https://youtu.be/GSVu_NhKBt8?si=2GsgHgwoOdpHvTB2).  We do not know the number of takes it took to produce the video, the amount of trial & error taken to produce a drinkable product, or the cost necessary to produce a quality wine you would confidently share with family and friends at dinner.  The wine produced in the video is Zinfandel, one of my favorite varietals, produced in Washington state with locally grown grapes.  I know with a high degree of certainty that I can go to a local wine retailer, purchase a bottle of Zinfandel produced by the Maryhill Winery (https://greatnorthwestwine.com/2023/01/02/100-platinum-awards-and-counting-for-maryhill-winery/),  and have a winner that will resonate with the palates at my dining room table.

Doing something yourself can generate a sense of accomplishment and in some cases, save you money.  It can also result in failure, frequently multiple times, a less than quality end result, and in many circumstances cost you more in the end than if you hired a professional.   The common reasons to try to sell a business yourself include control and saving money.   The following are four reasons why smart entrepreneurs seek professional representation to sell their businesses:

1. Business Valuation – The proper valuation of a privately held company or family business is a sophisticated, nuanced subjective science requiring significant knowledge & experience. Most people, especially with the information available on the Internet, can come relatively close to the value of the tangible assets (Furniture, Fixtures, Equipment, Vehicles, and Inventory) of a business.  The art of valuing a business enters the process when a valuation of goodwill or “blue sky” is sought.  What are the reputation, intellectual property, processes, competitive advantages, staff, and market position of a business worth?  It is not difficult to ascertain that the basic equation for valuing a business is EBITDA times a multiple.  Any accountant, and most entrepreneurs, can calculate EBITDA.  The difficulty falls in determining the correct multiple to use. Employ too low of multiple and a business seller takes their company to market as a value proposition which has a probability of resulting in a sale, but likely will leave dollars on the table.  Utilize too high of a multiple and the business may not generate any offers and has a lower probability of selling.   An experienced, knowledgeable business broker has the ability to dial in the right multiple. The following article provides an overview of the elements that should be taken into consideration when building a multiple (https://ibainc.com/blog/gregory-kovsky/the-fundamentals-of-business-valuation-ebitda-times-a-multiple/).  Another common approach to valuing assets is to use market comparables.  This works for residential real estate and vehicles.  Why not businesses?   First, comparable business sale information is not commonly published in the public domain like real estate, so the data set is very limited.  Second, no two businesses are exactly the same.  My vehicle of choice is a Dodge Ram 1500 Limited ( https://www.ramtrucks.com/ram-1500/specs.limited.html).  I can purchase this vehicle in Washington, Texas, or North Carolina for approximately the same value.  Two businesses doing the same revenue and profit one in Washington and the other in Oregon cannot be accurately valued using comparables for a variety of reasons including they have different equipment, customer concentration, staff infrastructure, and tax environments for operation.  It is also unknown when assessing sold business comparable information whether a sale was completed at a discount because of health reasons or sold at a premium to a competitor in a strategic merger.  A quality business broker will take a company to market at a value they can justify based on their knowledge of present market dynamics.  A DIY individual will do the equivalent of licking their finger, putting it up in the air, and taking a guess related to what the weather will be like in the next couple of months.

Broker Note: Caution should be taken when using a CPA or business appraiser to value a business.  They will definitely dial-in the appropriate EBITDA figure, but what they likely will lack is the local, present knowledge related to recent transactions in the relevant industry.   There is no substitute for local and industry specific knowledge in the valuation of a business. (https://ibainc.com/blog/gregory-kovsky/the-value-in-using-a-local-business-broker/).

2. Marketing – The successful marketing of a business for sale requires skill and experience. Skill can be found in protecting the likely confidential nature of the information a company is for sale.   Few business owners want their employees, customers, competitors, and/or vendors to know that their business is for sale.  A quality business broker will have processes in place to protect this information.   Experience comes in the ability to create a robust marketplace and identify the best prospects for a potential acquisition in a specific location and industry.  Competition for a company is traditionally good for the seller.  Negotiating with one party removes the opportunity to have the price pushed higher through offers from multiple buyers and/or keeping a buyer motivated to close the transaction out of fear of being replaced by an alternative buyer.  Many firms, like IBA, which employs an 100% paid on performance business model, will cover all marketing costs associated with selling a business as part of their fee payable only upon a successful closing.  A DIY individual attempting to sell their business will pay marketing expenses regardless of whether success is achieved, and will lack the knowledge relating to whether their business sale generated the maximum number of potential buyers.
3. Negotiations –    The foundational element of any business purchase & sale negotiation is price.  If the parties cannot reach an agreement on price, a transaction will not be completed.  It has been my experience that professionally represented businesses sell for 10 – 20% more in the market than ones being sold by owner.  This fact alone makes the decision to engage a top tier business sale intermediary an easy decision.   Consider a business with an estimated market value of $4,500,000 – $5,000,000.  If a DIY business seller can sell the business for $4,500,000 and the business broker for $5,000,000, even paying a 6% commission on the sale the entrepreneur who used the business broker would net $200,000 more with a post transaction fee value of $4,700,000 than the party who sold the business themselves.  In addition to the enhanced monetary value, the party would get a professional advisor with knowledge, experience, and skill to complement their attorney and CPA.

Price is the starting point for negotiations.  However, in all business sales there are many other elements that need to be negotiated including transition period employment/consulting, tax allocation, a non-competition agreement, and terms of payment for the purchase price.  Business Brokers have the ability to complement other professional advisors, bringing knowledge and experience to the table acquired in prior transactions in the same geographic area and/or industry.

4. Deal Facilitation – Communication between parties, attorneys, and CPA’s has the possibility of becoming confrontational and potentially expensive without professional facilitation. Most experienced M&A intermediaries have seen attorneys arguing over non substantive issues run up significant legal bills for their clients. A business broker value, especially one with compensation 100% tied to the successful completion of a transaction, is that they are a sunk and not an incremental cost.  Conversations and tasks assigned to the business broker result in no additional fees for the seller.  They also have the ability to talk with both parties in a problem solving role, something attorneys cannot do without the other attorney being present.  If each attorney costs $450 per hour ($900 per hour combined) is it better to have the business broker work with the seller and buyer to arrive at the term and area for a non competition agreement and/or the rate of compensation for the seller post closing as an employee or consultant or the parties billing in six minute increments?

Most business sellers want to maximize the amount of cash they get at closing.  Sourcing acquisition capital to support a business purchase often requires shopping the loan and significant administrative engagement with a bank.  An experienced, knowledgeable business broker will have bankers in their Rolodex willing and able to finance business acquisitions in the relevant area and industry.  They will also serve as a time tested guide through the financing process with the ability to navigate through mud and thorny areas in pursuit of a collective objective, the completed transaction, of the seller, buyer, and the broker, who frequently will not be paid unless money changes hands.

The more sophisticated, nuanced an activity, the more knowledge, experience, and skill matter.   Would you board a flight for Australia on a plane flown by a pilot who learned how to fly through watching a series of videos?  Would you have your best friend repair a torn Achilles tendon because they would take a bullet for you and were on the pickleball court with you when it happened?  A business is often the “life work” of an entrepreneur.  Frequently, it is the most valuable thing they own and an entity that contains their “work family” and supports beloved customers. Is its sale something you want to do yourself or bring in an expert to perform?  If you are interviewing experts to facilitate the sale of your privately held company or family business in Washington or Oregon, IBA would welcome the opportunity to interview for the position conveying our market leading knowledge, experience, and skill that has made the firm the #1 choice for entrepreneurs in the Pacific Northwest since 1975.

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, legal, accounting, banking, and wealth management communities on subjects relevant to the purchase & sale of privately held companies and family businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.