How to Value a Home Services Business: The Complete Guide
SDE multiples, EBITDA multiples, revenue multiples — which method is right for your business? A comprehensive guide to home service business valuation.
Read Article →How-ToJanuary 2025 · 7 min read
Business Broker vs. Selling Your Business Yourself: The Real Tradeoffs
Broker fees are 8–12% of the sale price. But sellers who use experienced brokers consistently achieve 15–30% higher prices. Here's the honest math.
JT
Jason Taken
HedgeStone Business Advisors
The most common objection to using a business broker is the fee — typically 8–12% of the sale price. For a $2M business, that's $160K–$240K. It feels like a lot. But the data consistently shows that sellers who use experienced brokers net more after the fee than those who sell themselves. Here's the honest analysis.
Why Buyers Lowball Direct Sellers
When a business owner sells directly (no broker), buyers know they're the only party at the table. There's no competition. The buyer can take their time, nitpick the financials, and negotiate hard on price and terms. They know the seller doesn't have 15 other qualified buyers ready to step in. The result: direct sales consistently close at 15–25% below professionally brokered deals, because there's no competitive dynamic driving price.
What a Business Broker Actually Does
A business broker: prepares a confidential information memorandum (CIM) that presents your business professionally, builds a qualified buyer list of 20–50 targeted buyers (PE, strategic, individual), runs a managed process with controlled disclosure and NDA enforcement, fields initial inquiries and qualifies buyers before you spend any time with them, negotiates the LOI and purchase price, and coordinates due diligence so you're not managing buyers directly.
The Math: Broker vs. No Broker
Example: $500K SDE business. No broker: buyer offers 2.75x SDE = $1.375M. No fee. Net: $1.375M. With experienced broker: competitive process drives 3.5x SDE = $1.75M. Broker fee: 10% = $175K. Net: $1.575M. That's $200K more in your pocket after the fee — because competition increased the multiple by 0.75x. The fee pays for itself many times over in a well-run process.
What to Look for in a Business Broker
Not all brokers are equal. Key differentiators: industry-specific experience in home services M&A (not a generalist), PE and strategic buyer relationships (not just BizBuySell), transaction track record with verifiable deals, process transparency (clear milestones, regular updates), and references from past sellers. Avoid brokers who list your business publicly under your name immediately — confidentiality is critical.
Frequently Asked Questions
Related Articles
How to Reduce Owner Dependency Before Selling Your Business
If your business can't run without you, buyers will discount heavily. Here's the 90-day playbook for reducing key-man risk before going to market.
Read Article →How to Keep Your Business Sale Confidential (And Why It Matters)
Most sellers fear what happens if employees, customers, or competitors find out the business is for sale. Here's how a confidential process protects you.
Read Article →See What Your Business Is Worth
Free Consultation →No contact forms. No obligation. Direct access to Jason Taken, Business Broker.