Thinking about selling your business but don’t want to go through a broker or public listing? You’re not alone. Many entrepreneurs are exploring private sales for small business as a faster, more discreet, and often more profitable way to exit on their own terms.
Whether you’re retiring, shifting gears, or just ready for a new chapter, a private sale could be your ideal path. In this guide, we’ll break down what private sales are, how they benefit small business owners, and the simplified steps you can take to get started.
What Are Private Sales for Small Business?
A private sale is when a business owner sells their company directly to a buyer—without listing it on public marketplaces or using a business broker. These sales are often more personal, flexible, and cost-effective.
In private sales for small business, the seller controls the process, manages communications, and negotiates directly with potential buyers. These buyers could be competitors, employees, industry contacts, investors, or even family members.
The goal? A smooth, confidential transition that minimizes fees and maximizes value.
Why Small Business Owners Choose Private Sales
Private sales offer several unique advantages, especially for owners of small or family-run businesses:
1. Lower Costs
Skipping the broker means avoiding hefty commissions—often 8–12% of the sale price. That’s money that stays in your pocket.
2. More Control
In a private sale, you decide how your business is presented, who sees the financials, and how fast the process moves.
3. Confidentiality
Public listings can alert customers, staff, or competitors too soon. Private sales keep things under wraps until you’re ready.
4. Better Fit Buyers
When you connect directly with potential buyers—especially those already familiar with your business or industry—you’re more likely to find someone who values what you’ve built.
Who Should Consider Private Sales?
Private sales for small business are ideal for:
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Local businesses with a loyal customer base
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Owners who have a strong network or potential buyers in mind
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Those wanting to sell quietly and quickly
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Entrepreneurs who don’t want to pay high brokerage fees
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Family-run businesses transitioning ownership internally
If you’re hands-on, organized, and willing to do some outreach, a private sale can be a rewarding route.
Simplified Steps for a Successful Private Sale
Let’s walk through a streamlined process to help you prepare for and complete a private sale with confidence:
Step 1: Prepare Your Business for Sale
Before approaching any buyer, get your business ready:
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Organize financials (P&Ls, balance sheet, tax returns)
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Document key processes and systems
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Review contracts, leases, and intellectual property
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Minimize owner dependency
The cleaner and more turnkey your business looks, the easier it will be to sell.
Step 2: Determine a Fair Asking Price
Use valuation tools or consult a CPA to come up with a reasonable price. Most small businesses are valued based on seller’s discretionary earnings (SDE) and a multiple (typically 1.5x to 3x for small businesses).
Avoid overpricing—buyers will compare your offer to others in the market, even if yours is private.
Step 3: Identify and Contact Potential Buyers
Think about who would be a great fit:
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Existing employees or managers
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Competitors
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Vendors or suppliers
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Loyal customers
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Local investors or entrepreneurs
Reach out via email or phone with a short, professional message. You can also use LinkedIn or industry forums to find interested parties discreetly.
Step 4: Use a Non-Disclosure Agreement (NDA)
Before sharing sensitive details like financials or customer lists, have serious buyers sign an NDA. This protects your business while allowing deeper conversations.
Step 5: Negotiate and Draft the Agreement
Once you find the right buyer:
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Discuss price, terms, and transition support
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Work with a small business attorney to draft a purchase agreement
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Be clear on what’s included (inventory, assets, customer contracts, etc.)
You don’t need a broker, but legal support is crucial to avoid future issues.
Step 6: Close the Deal and Transition Smoothly
Finalize the paperwork, transfer assets, and support the handoff as needed. Many private sales for small business include a short training or support period after closing.
Mistakes to Avoid in Private Sales
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Being unprepared: Incomplete books or missing documentation will scare off serious buyers.
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Overvaluing your business: A high asking price with no justification can stall the process.
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Ignoring legal help: Even without a broker, you still need solid contracts and legal protection.
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Failing to qualify buyers: Always verify financial capability and intent before moving too far.
Final Thoughts: Is a Private Sale Right for You?
Private sales for small business offer a straightforward, cost-effective way to exit without going public or handing over control to a third party. If you’re looking for more discretion, lower costs, and a direct connection to your buyer, this route is worth serious consideration.
Remember, preparation is everything. The better positioned your business is—from financials to operations—the faster and smoother your sale will be.
Thinking about selling your business privately? Start by organizing your records and making a list of potential buyers in your network. You might be closer to a successful exit than you think.
