It happens more often than you'd think. A competitor calls. A supplier mentions they know someone who's interested. A customer asks, half-jokingly, whether you'd ever consider selling. And suddenly you're in a conversation you weren't expecting to have.
The instinct is to feel relieved. The hard part — finding a buyer — seems to have solved itself. But this is exactly the moment when most business owners give away the most value, and sometimes the entire deal.
Why unsolicited buyers are not a shortcut
An unsolicited approach is not evidence that your business is worth what you think it is. It is evidence that someone else has identified an opportunity — and they have had time to think about it, while you have not.
The buyer who approaches you directly has almost certainly done preliminary research. They know roughly what they want to pay. They have a negotiating strategy. They are hoping that the flattery of being approached, combined with the convenience of avoiding a formal sale process, will lead you to accept a price below market.
This is not cynical — it is rational. If you were buying a business, you would do the same thing.
What happens without independent representation
Without a broker in the room, several things tend to happen:
- You negotiate against yourself. The buyer asks questions. You answer them. Each answer reveals your priorities, your timeline, your concerns. A skilled buyer uses this information to structure an offer that addresses your stated concerns while reducing the price.
- The information memorandum never gets written. Without a formal process, the buyer controls what information they receive and when. They will ask for everything that supports a lower price and ignore everything that supports a higher one.
- There is no competing interest. The single most powerful tool in any negotiation is the credible threat of an alternative. Without a broker running a parallel process, the buyer knows they are the only one at the table.
- Due diligence becomes a renegotiation. Buyers who approach directly often use the due diligence period to chip the price down. Without an experienced intermediary managing the process, sellers frequently accept price reductions that were never justified.
What a broker does when a buyer has already appeared
Engaging a broker after an unsolicited approach is not about starting over. It is about levelling the playing field before the negotiation gets serious.
The broker's role at this point is to:
- Establish an independent valuation so you know what the business is actually worth
- Prepare an information memorandum that presents the business on your terms, not the buyer's questions
- Run a parallel process — even a quiet one — to establish that other buyers exist
- Manage the due diligence process so that information is released in a controlled, structured way
- Negotiate the heads of agreement and settlement terms with commercial experience
You keep your accountant. You keep your lawyer. The broker adds the commercial layer that neither of them provides — the market knowledge, the buyer management, and the negotiating experience that turns a reasonable offer into a good one.
The cost of not engaging
The broker's commission on a business sale is typically 3–8% of the sale price, depending on the size and complexity of the transaction. On a $2 million business, that is $60,000–$160,000.
The average price difference between a negotiated direct sale and a properly run broker process, on the same business, is typically 15–25%. On a $2 million business, that is $300,000–$500,000.
The maths is straightforward. The question is whether you want to save the commission or maximise the outcome.
