When you’re getting ready to buy or sell a small business, one of the first decisions you’ll face is how to approach the deal: work with a broker or go the private route?
Both options can work. But the process, the people involved, and the potential pitfalls vary significantly depending on the path you take. And whether you’re a buyer or a seller, those differences can shape how your deal plays out.
This guide breaks down what to expect with each approach, the trade-offs on both sides, and how to decide which route fits your goals.
What Do We Mean by “Brokered” vs. “Private”?
A brokered sale involves a third-party intermediary – usually a business broker or M&A advisor – who represents the seller. They prepare marketing materials, list the business, manage buyer communication, and help move the deal toward closing.
A private sale is negotiated directly between buyer and seller, typically through cold outreach, referrals, or existing relationships. There’s no intermediary involved, which means more control but also more responsibility.
The end goal is the same – a closed deal – but the mechanics and dynamics are completely different.
For Sellers: What You’re Signing Up For
Working With a Broker
Hiring a broker usually means a more structured and streamlined process. A good one will help you organize your financials, prep a marketing package, and handle buyer inquiries – so you can stay focused on running the business.
They also bring access to an existing buyer network, which can help generate interest and competitive offers. If your goal is to maximize valuation or get multiple bids, that reach matters.
The trade-off: broker fees, typically 8% to 12% of the sale price. You’ll also have less control over how the business is positioned and who gets access to it. And while many brokers are excellent, some are more focused on closing quickly than finding the right buyer.
This route tends to be the best fit for first-time sellers or owners who don’t have the time or experience to manage a sale themselves.
Going the Private Route
Selling privately means you’re doing it all – finding buyers, fielding questions, managing diligence, and negotiating terms. The upside: no broker fee and full control over the process.
It can be a good choice if you already have a buyer in mind or want to keep the sale discreet. You also have more flexibility in how the deal is structured and how you handle the transition.
But private sales demand more time and effort. Without a broker’s network, it may take longer to find a qualified buyer. And you’ll need to vet them yourself, which means more risk of wasting time with buyers who can’t or won’t close.
This approach works best if you have a strong network, a specific target, or prior experience selling a business.
For Buyers: What You’ll Be Dealing With
Buying a Brokered Business
Brokered deals are usually more organized. You’ll get a CIM (Confidential Information Memorandum), access to financials, and a defined timeline for making an offer. Sellers are often better prepared, and the broker helps keep the process moving.
That structure can make life easier – especially for first-time buyers. But it also means more competition. Desirable listings often attract multiple buyers, and you may face a tight process with firm deadlines.
You’ll also have less flexibility to negotiate creative terms. Brokers typically coach sellers on valuation and structure, which can make them less open to alternatives like earn-outs or seller financing.
Brokered deals are a good fit if you want speed, transparency, and a clear process – and you’re ready to move fast when the right opportunity comes up.
Buying Off-Market
Private deals require more legwork. You’ll need to identify targets, run outreach, and build relationships from scratch. But the upside is meaningful: less competition, more direct conversations, and often more flexibility on price and terms.
You’re also more likely to connect with sellers before they’ve formalized an exit plan. That opens the door to creative deal structures, longer transitions, or seller financing – none of which are guaranteed, but they’re more common off-market.
The downside? Messier financials, slower timelines, and sellers who may not fully understand the value of their business – or be ready to let go. Without a broker keeping things on track, some deals fizzle out due to simple lack of momentum.
If you’re patient and comfortable building trust over time, private deals can yield better alignment and stronger outcomes.
Which Approach Is Right for You?
For sellers, working with a broker usually means less hassle but higher cost. It’s a smoother, more professional process, but you give up control and pay a meaningful fee. Going private means more effort, but full control and potential cost savings.
For buyers, brokered deals are cleaner and faster, but more competitive and rigid. Private deals require more sourcing and relationship-building, but often offer better pricing, flexibility, and seller rapport.
In reality, plenty of deals happen through both channels. Some buyers toggle between brokered listings and proprietary outreach. Some sellers test interest off-market before going to a broker.
What matters most is understanding your own priorities: control, speed, flexibility, price. Once you’re clear on those, the right approach becomes easier to identify.
Final Thoughts
How you approach a deal often matters just as much as the deal itself. Whether you’re buying or selling, the path you choose can shape everything from valuation to negotiation dynamics to the overall experience.
Before jumping in, take a step back. Think through your priorities, how hands-on you want to be, and what kind of process you’re best equipped to manage. A thoughtful approach on the front end often leads to a smoother, more successful outcome.
