Sell The Business Yourself vs Using a Business Broker in Singapore. Which is Better?

Mac
Aug 31
7 min read

Updated: 3 days ago

So you’re thinking of selling your business?

Congratulations to you! This means you have done an amazing work. That’s a big decision, given that it has taken you at least 10 years to build what you have today. Now comes the next big question: DIY or find a professional business broker in Singapore to help you? This is like choosing between cooking a 8-course meal yourself or going to restaurant – both have their respective benefits and drawbacks.

It is not a trivial matter, since selling business in Singapore isn’t like selling your old sofa on Carousell. We’re talking about the cumulative output from your decades of sweat, blood and tears. This will impact your financial future, possibly your retirement and your family generational wealth too. So, think carefully before you decide.

Let’s break it down, we’ll dissect selling the business yourself versus getting a Singapore business broker to manage the entire process for you.

Doing It Yourself: The "Save Money" Approach with the Potential Nightmare

Okay, let’s face it, the first thing that comes into your head is probably, "Hmmm, let’s save on commission! Why pay people the money when you can do it yourself?” Yes, on the surface, you are right, this does sounds sweet. No need to pay someone a cut of your hard-earned money. You’re the boss, and you know your business best. You have sold to so many customers in the last 2 decades, so what is this to you? Why not just put it out there and wait for the offers to roll in?

The Good (In theory)

Save Money: This is the biggest draw. No broker fees mean more money in your pocket… if you manage to sell successfully at a good price. That’s a big assumption though! How many business owners has successfully sold their business by themselves? Do you know of any yourself? You might want to ask them about their experience.
Full Control: You call the shots. You decide who to talk to, what information to share, and how to negotiate. Sounds powerful and right up your alley, isn’t it? After all, business owners love autonomy.
Knowledge of Your Business: Nobody knows your business like you do. You can passionately explain the bolts and nuts, the potential growth plan, the secret sauce of your business.

The Bad (Where reality hits)

Time Commitment: Most people don’t realize that selling a business is not a sprint, but a marathon. On average, selling a business in Singapore or Malaysia can take anywhere between 8 months to 24 months. Moreover selling a business is a full-time commitment, on top of your actual full-time role of running your own business!
You need to prepare all the documents, market your business, handles tonnes of enquiries from serious buyers and time wasters, arrange meetings, negotiate and manage the expectation of the multiple buyers. Most business owners don’t realize that an investor can evaluate anywhere between 50 to 500 businesses before they buy a business in Singapore. Most investors end up not buying any business at all!
Business Valuation: You might be emotionally attached to your business and overvalue it, or you might undervalue it because you just want to get it over with. A professional business broker in Singapore has the experience and market knowledge to give you a realistic valuation. You don't want to leave money on the table, or scare away genuine buyers with a sky-high price. It requires experience to determine if a particular asset is sellable at certain price point.

Finding Buyers : Where and how do you even find serious buyers? They’re not the typical crowd that walk around in Orchard Road. These are individuals who are prepared to spend at least a few million dollars (SGD) to acquire a unique and illiquid asset. They need to have the financial resources, risk appetite, a strong intent and tingle of urgency to move things forward. I reckon less than 0.25% of the population in Singapore are right audience for this.
A Singapore business broker will have the right network, databases, marketing strategies and skillset to reach the right people. They are able to better qualify suitable buyers for your business.
Negotiation and Project Management Skills: Negotiation and managing the entire selling process well is an art. Buyers will want to buy it at a good price. It’s common for them to find flaws and push for the best deal for themselves. Are you ready for that kind of pressure? Do you know how to stand your ground without killing the deal?
Confidentiality: Selling a business is sensitive. You don’t want your competitors, employees, or customers to know until the deal is almost done. How do you market your business discreetly when you’re doing it yourself? Loose lips sink ships.
Legal and Due Diligence: There’s a lot of legal paperwork involved, and buyers will do their due diligence (financial, legal and operational). Do you know what they’re looking for and their primary concerns? Can you handle their questions and requests professionally? One wrong move can jeopardize the whole deal, especially if you are down to the last serious buyer on hand.
Emotional Toll: Selling your baby is emotional. Dealing with rejections, tough negotiations, and the uncertainty of the process can take a toll on you. Deal fatigue is real and happens often. A business broker in Singapore or Malaysia can act as a buffer and keep things professional. We know when and where to pull the plug.

Using a Singapore Business Broker

Think of business broker as a specialist in the complex world of business sales. They’ve been through this process many times and know the tricks of the trade.

The Good (where the magic happens):

Expertise and Experience: Brokers deal with business sales day in, day out. They know the market trends, the going rates for different types of businesses, and what buyers are looking for. They can guide you through the entire process, help you avoid the pitfall and save you time.
Realistic Valuation: They’ll give you an objective and data-driven valuation of your business, ensuring you don’t overprice or underprice it. This increases your chances of a successful sale, while prioritising your financial interest.

Access to a Network of Buyers: Good brokers have a wide network of potential buyers, including individuals, investors, and other businesses looking to acquire. They can tap into these networks to find the right fit for your business. Despite all the advantages business broker may have, finding the right buyer is often as challenging as searching for a needle in a haystack.
Marketing and Confidentiality: Business brokers know how to market your business discreetly to the right audience without revealing its identity prematurely. They’ll handle the initial enquiries and filter out the time-wasters.
Negotiation Power: They are skilled negotiators and can act as a buffer between you and the buyer, ensuring your interests are protected and helping to reach a mutually agreeable deal.
Handling Due Diligence: Business brokers can help you prepare for and navigate the buyer’s due diligence process, ensuring all the necessary information is provided smoothly and professionally.
Time Savings: They handle a lot of the heavy lifting, freeing up your time to focus on running your business during the sale process. This is crucial to maintain the business's value and ensure a smooth transition.
Professionalism and Objectivity: They bring a level of professionalism and objectivity to the process, which can be crucial in keeping emotions in check and ensuring a smooth transaction.

The Not-So-Good (the part where you need to open your wallet):

Commission Fees: This is the main drawback. Singapore business brokers typically charge a commission based on the final sale price. This can be a significant amount, depending on the size of your business. (It can range from 3% to 15% of the deal size) However, consider this as an investment – a good broker can often get you a higher sale price than you could achieve on your own, potentially offsetting the commission.
Finding the Right Broker (Need to Do Your Homework): Not all business brokerage firms are created equal. You need to do your research, check their track record, get referrals, and make sure you feel comfortable and confident with their abilities.
Loss of Some Direct Control: While you’re still the ultimate decision-maker, you’ll be relying on the broker’s advice and expertise. You need to be comfortable delegating some aspects of the sale process to them.

Which option should you pick?

There’s no one-size-fits-all answer. It really depends on your situation, your resources, and your risk appetite. If the business valuation of your company is above $1 million, it’s better to get a full-time business brokerage firm to handle it for you. (In my opinion)

Consider selling on your own if:

Your business is very small and straightforward.
You have a ready buyer lined up.
You have a lot of time in marketing and managing the entire process.
You are very comfortable handling sensitive information and maintaining confidentiality.
You are prepared for the emotional rollercoaster.

Consider using a Singapore business broker if:

Your business is complex or has significant value.
You don’t have a ready buyer.
You are short on time and want to focus on running your business.
You lack experience in M&A (merger and acquisition).
You value professional expertise in handling your prized asset.
You want to maximize your chances of getting the best possible price and a smooth transaction.

Final thoughts

At the end of the day, selling your business is a big deal. Don’t be penny pincher or you may end up saving a penny but losing a pound. You can potentially mess up the whole sale or leave a lot of money on the table.

Think of a good Singapore business broker as an investment. They bring expertise, a network, and peace of mind to a complex process. (This process will likely last between 8 months to 24 months) They can help you navigate the choppy waters and reach the shore with a successful sale.

So, take a look in the mirror, be honest about the current situation and weigh the pros and cons carefully. Choose wisely and your future self will thank you for it.