Should You Use an M&A Advisor to Sell Your Business, or Do It Yourself?

The answer, and our conflict in giving it

All else equal, an owner selling a business in the $2M to $25M EBITDA range without a competent M&A advisor has a materially lower chance of completing a sale at all. Where the sale does complete, it tends to complete at a lower price and on worse terms. That is our position, and the rest of this article sets out the mechanism behind it so you can judge whether you agree.

Before that, the obvious disclosure. M&A Concierge is paid a referral rate by advisors, so we have a commercial interest in you engaging one. Treat what follows as reasoning to be checked rather than a conclusion to accept. There is also no Australian study comparing outcomes between advised and unadvised sales, so nobody, including us, can put a number on any of this. What can be set out is what actually happens in a process and where it goes wrong, which is more useful than a statistic anyway.

The question most owners ask is whether an advisor is worth the fee. That is a question about price, and M&A Advisor vs Business Broker works through the cost comparison. The more important question is whether you complete at all.

Why completing is the number that matters

Owners weigh the fee against the price and conclude that doing it themselves saves several hundred thousand dollars. The larger risk sits somewhere else.

A sale process that fails costs you nine to twelve months, the legal and accounting fees you have already spent, and the attention you took off the business while it ran. It usually costs you some confidentiality, because staff, customers or suppliers have worked out what was happening. And it leaves you with a business that has been shopped and did not sell, which can be a materially harder thing to take back to market two years later. Buyers talk to each other, and a business that was available and did not transact carries a question mark that takes time to shake.

Set against that, the fee is a second-order consideration. The first job of an advisor is not to squeeze the last increment out of the price. It is to get you to completion.

What running a process actually involves

The reason a sale is hard to run yourself is not the volume of work, though there is a lot of it. It is that almost every step involves a judgement you have no basis for making if you have not done it before and you’re often blind to things because of your emotional investment.

Sequencing is most of the job. What is released, to whom, in what order, and against what commitment from the other side. Give too much too early and you lose your leverage and your confidentiality at the same time. Give too little and credible buyers walk, because they have other things to look at. There is no rule for this. It is judgement built on having watched it play out repeatedly.

Then there is knowing what normal looks like. Whether a warranty schedule is standard or aggressive. Whether a proposed indemnity cap is market or opportunistic. Whether a buyer asking for another four weeks of exclusivity is genuinely working or quietly stalling to see whether you get nervous. Whether a diligence finding justifies the price reduction being attached to it. A first-time seller cannot tell the difference between ordinary process friction and being worked over, which means they concede in the wrong places and dig in on the wrong ones.

Pace is the third piece. Deals do not usually die from a single catastrophic event. They die from drift, because the longer a process runs the more chances there are for something to change: a customer leaves, a quarter comes in soft, a buyer’s strategy shifts, a key person resigns. Holding several parties to the same timetable, keeping information flowing so nobody has an excuse to slow down, and knowing when to force a decision are all things an experienced advisor does deliberately and a first-time seller does not know to do.

Competition sits inside this rather than alongside it. A field of credible buyers held to a bid deadline is what sets the price, and it is also what keeps the process moving and stops any single buyer from retrading late. But you only get that field if the preparation, the sequencing and the pace are right. It is an output of running a process well, not a separate service.

And underneath all of it, someone has to absorb the work so that you can keep running the business. That is not an administrative point. It is the difference between the earnings a buyer is paying for holding up through the process and drifting downward while you are distracted, which is one of the most common reasons a price gets reset before completion.

Where deals die

Our analysis of the Australian mid-market indicates the failure modes are consistent, and most of them are process failures rather than business failures.

• Diligence findings that were not anticipated. The buyer’s accountants and lawyers find something the seller had not surfaced. The process stops while it is quantified and argued about. Sometimes it reprices the deal, sometimes it ends it. Almost always it was findable in advance.
• Retrade late in the process. A buyer who knows you have no alternative reduces the price after heads of agreement, when you have been at it for seven months and have already told yourself it is done. Without another party at the table, the seller usually takes it.
• Earnings drifting during the process. The owner is spending most of their week on the sale, trading softens, and the buyer reprices against the new numbers. This is entirely self-inflicted and extremely common.
• Structure discovered too late. The tax consequence of the deal shape, or a duty exposure, or a shareholder issue, surfaces in the drafting rather than in the planning. Unwinding a deal structure at that stage is expensive when it is possible at all.
• Seller fatigue. Processes are long and adversarial. Owners who are running the sale themselves on top of their day job frequently reach a point where they accept terms they would have refused in month two, simply to be finished.
• Ordinary mistakes, made in good faith. This is the one owners least expect. Both sides can be honest, capable and genuinely trying to get to completion, and the deal still goes badly, because someone with no transaction experience made a reasonable-looking decision that turns out to be wrong. Information released in the wrong order. A term sheet that leaves the completion accounts mechanism vague. An earnout defined loosely enough that both parties later read it differently. None of these are bad faith. All of them cost time and money to undo, and some of them cannot be undone at all once a document is signed.

The two things you cannot buy in

You can engage a lawyer for the documents and an accountant for the tax. Two things are harder to source.

The first is time. A sale process is close to a full-time commitment for roughly six months, and it lands on the person who is least able to give it up, because they are also the person running the business. Buyers want management meetings, site visits, follow-up questions, additional analysis, and they want them promptly, because delay reads as disorganisation. If you cannot free up that capacity without your trading performance dropping, you have a problem that has nothing to do with your negotiating ability.

The second is experience. Having run a process before is what lets you tell the difference between normal and abnormal, and it cannot be acquired for a single transaction. Reading about it is not the same thing.

If you have both, running your own sale is difficult but possible. If you have neither, the realistic chance of completing on decent terms is very low, and the honest advice is not to attempt it. These are not advantages that improve your outcome at the margin. They are the entry conditions for having a chance at all.

When doing it yourself is defensible

There are situations where running your own sale is a reasonable decision. It is worth being precise about what that means: not that the outcome will be as good, but that the trade-off is acceptable given what you are trying to achieve.

• You already have a committed, funded buyer. A co-owner buying you out, a management team that has been discussing succession for years, a family member, or a long-standing trade partner with the money to complete. In practice this is a management buyout or something close to it, and the largest thing an advisor brings, finding and creating a field of buyers, is not what you need. What you still need is someone to run the process and document it properly.
• The transaction is genuinely simple. One entity, one owner, no unusual assets, no complex tax position, no landholdings, no material contracts with change of control clauses. Simple transactions exist, and a simple transaction with a known buyer is the clearest case.
• Price is not your primary objective. Some owners care more about who takes the business on, what happens to their staff, or completing quickly for personal reasons. That is a legitimate set of priorities. If you would take a lower number from the right buyer over a higher number from an unknown one, you are not solving for price, and a competitive process is answering a question you have not asked.
• You have done this before. Owners who have bought or sold businesses previously, or who came from corporate finance or transaction accounting, start with the thing that cannot otherwise be bought.

Two qualifications sit on all of these. You are still accepting a lower expected price and weaker terms than a well-run process would produce. And you must buy in the expertise you do not have: an experienced transactional lawyer and a tax adviser, engaged at term sheet stage rather than at signing. Doing it yourself does not mean doing it alone. It means substituting a narrower set of professionals for a broader one, and accepting that nobody is running the process except you.

The comparison

If you proceed, this is the cost of admission

None of the following is beyond a capable owner. All of it has to be done, and it is the minimum rather than the whole job.

• You do not need a licence to sell your own business. State licensing regimes regulate acting as an agent for someone else. In New South Wales, Victoria, Queensland, Western Australia and South Australia a person who brokers a business sale for another party needs a licence, but an owner selling their own business is not acting as an agent and does not. The same applies under financial services law: arranging a share sale for another person is generally dealing in a financial product and requires an Australian Financial Services Licence, but a person dealing on their own behalf is expressly outside that requirement.
• Engage a transactional lawyer, early. No Australian jurisdiction requires you to use a lawyer to sell a business or shares, and this is nonetheless the last place to economise. The sale agreement is where the money actually sits: the warranties you give, the indemnity caps, the restraint of trade, the completion accounts mechanism and any earnout definition all live there rather than in the headline price. Use someone who does transactions regularly rather than a general commercial solicitor, and bring them in at term sheet stage. Most of the expensive mistakes are made before the drafting starts.
• You will negotiate against someone who does this for a living. A corporate acquirer has a transactions team. A private equity buyer does this professionally and has done it several times this year. You will be negotiating warranty scope, indemnity caps and earnout definitions against people who know exactly which of those points are worth money and which are decoration. Putting an experienced transactional lawyer in the room narrows that gap. It does not close it.

How advisors are regulated

If the argument is that you should engage an advisor, the next question is what engaging one actually guarantees. Less than most owners assume.

There is no M&A advisor licence in Australia. No register, no minimum qualification, no entry examination, no continuing education requirement. Anyone can use the title. What regulation exists arrives indirectly from two directions. Business brokers need a state agent licence in every mainland state, which brings trust account rules and a conduct regime. And a firm arranging the sale of shares is generally dealing in a financial product, which requires an Australian Financial Services Licence, bringing ASIC conduct obligations, professional indemnity requirements and mandatory membership of the Australian Financial Complaints Authority.

There is a gap in the middle. An advisor operating without either, for instance on asset sales structured as principal-to-principal advice, sits outside both regimes. And because AFCA can only consider complaints against its members, an owner whose advisor is unlicensed has no complaints avenue at all, only the courts.

The practical response takes ten minutes. Ask any prospective advisor for their state agent licence number and their AFSL number, or the licence under which they are an authorised representative. Both are publicly checkable through state fair trading registers and ASIC’s professional registers. An advisor with neither is operating outside both regimes, which does not make them bad at the job, but does mean you have no recourse if they are.

How to decide

Three questions, in order.

• Do you have a committed, funded buyer today? If not, you are looking for buyers, which is the part you cannot do alone, and the decision is effectively made.
• Can you give the process most of your working week for six months without your trading performance dropping, and have you been through one before? If the answer to either is no, running it yourself is not a saving. It is a low probability of completing.
• Is what you want mainly about price? If yes, a competitive process is the only reliable route to it. If your priorities are continuity, speed or who takes the business on, and you already have the right buyer, doing it yourself with strong legal and tax support is a defensible choice made with open eyes.

One thing that should not drive the decision is an unsolicited approach. Receiving one means your business has strategic value to at least one party, which is useful information and rarely means only one party would be interested. Before responding substantively, get an independent view of value.

Where M&A Concierge fits

Everything above assumes a competent advisor, and that assumption does a lot of work. A poor advisor is worse than none: you pay a retainer, you hand over six months, and you still do not complete, having burned your confidentiality and your credibility with the buyers who were approached badly. The gap between advisors in this market is wide, and it is not visible from the outside.

That is the problem M&A Concierge exists to solve. We are not an advisory firm and we do not run sale processes. We work on M&A advisor selection: matching business owners with the right advisor for their business, their sector and their deal size, drawn from a proprietary M&A advisor database spanning 100+ industry sectors across the Australian mid-market. Our fee is a uniform referral rate model, paid by the advisor rather than by you, and the rate does not change according to which advisor is recommended, so there is no incentive to steer you toward one firm over another. If you would rather run that search yourself, How to Find the Right M&A Advisor in Australia sets out the same criteria.