Thinking of selling your business yourself? It might seem like a way to save money—but the risks of selling a business on your own are real, and many owners underestimate them. From valuation missteps to financing failures, going it alone can erode value, scare off buyers, or even derail the deal entirely. Below are key risks to understand and what smart owners do instead.
Why Some Owners Consider Selling on Their Own
Many owners weigh the risks of selling a business on your own against what seems like a simpler path: save on fees, skip intermediaries, negotiate directly with buyers you already know. Some believe they understand how their business works and feel confident they can talk price. Others see an early offer and want to move quickly.
But that confidence often leads to two common errors: undervaluing or overvaluing your business. Undervaluing leaves money on the table—you accept less than the market would pay. Overvaluing, on the other hand, may scare off qualified buyers or result in a deal that never closes because expectations were unrealistic. Either outcome is costly.
Selling a business involves more than knowing revenue, costs, or even EBITDA. It’s about perception, risk, and buyer confidence. Without the backing of market data, it’s easy to err in either direction. A well-structured sale process helps avoid both traps: setting price too low out of fear, or too high out of wishful thinking.
Valuation Pitfalls Without Expert Guidance
Another major hazard in the risks of selling a business on your own is relying on DIY valuation models or off-the-shelf templates from the internet. Many sellers—or even CPAs—try to create an income approach financial model extracting discounted cash flows or projected earnings growth. But unless you deeply understand model assumptions, discount rates, scenario planning, and normalization adjustments, those models often produce misleading results.
Even sophisticated-looking spreadsheets can be wrong. They may not reflect the real business dynamics: volatile earnings, seasonal swings, customer or supplier concentration, or the mix of project-based versus contractual revenue. Parsing comparable transaction data is even harder: headline revenue or EBITDA numbers are just the tip of the iceberg. An effective valuation requires breaking down revenue into its components, adjusting for concentration risks, and smoothing uneven earnings patterns.
In fact, one article from The CPA Journal lays out nine valuation mistakes business owners often make, emphasizing that relying on shallow models or failing to deeply analyze the business is one of the most frequent errors. Proper valuation is an art backed by data, not a simple formula plug-and-play.
Limited Buyer Pool, Lack of Competition & Confidentiality Risks
When you try to sell on your own, you’re likely engaging only a small number of buyers—often those who approach you directly. That means you lose leverage before negotiations even start. Without multiple bidders, buyers can pressure terms, structure the deal in their favor, and lower the overall price. A key facet of the risks of selling a business on your own is surrendering control over how value is framed and captured.
Confidentiality is another major hazard. In a DIY sale, owners may inadvertently expose sensitive information to competitors, employees, or customers, jeopardizing relationships and value. At the same time, withholding too much information can backfire: buyers may interpret a lack of transparency as hidden problems, discount your offering, or withdraw entirely. Striking the right balance requires staged disclosure, vetting buyers, and controlling the narrative—skills professionals bring to the table.
Negotiation Disadvantages
Even if a serious buyer emerges, negotiating a sale is rarely straightforward. Buyers—especially private equity groups, strategic acquirers, or seasoned investors—have negotiated business transactions repeatedly. They know how to structure terms, embed protective clauses, and shift risk back to sellers. Sellers going it alone are almost always at a disadvantage.
A frequent deal failure point: financing. Many buyers will default to using their bank or the seller’s bank for debt funding. But banks may balk at lending large sums against goodwill or intangible value. Without existing banking relationships or satisfaction from the lender, transactions often collapse. Advisors with established lender networks and credibility can structure deals that survive underwriting scrutiny—something DIY sellers rarely can manage.
Legal, Financial, and Tax Complexities
One of the biggest and most underestimated risks of selling a business on your own lies in the legal, financial, and tax complexities of the transaction. These aren’t just “formality” issues; they can derail a deal or leave a seller exposed long after closing.
Sellers often lean on their long-time CPA or attorney to handle the sale, assuming familiarity with the business is enough. The reality is that many of these professionals have experience only with smaller matters such as partnership buyouts, not the full scope of a sophisticated M&A process involving outside buyers, structured financing, and layered deal terms. Even well-meaning advisors can unknowingly miss key items or slow the process to a crawl.
We recently completed a transaction where the seller had spent over a million dollars in fees with their CPA and attorney over a five-year period, with no deal to show for it. Their advisors were not experienced in navigating a true M&A process with professional buyers. When CGK stepped in, we repositioned the business, ran a competitive process, and completed the deal in just four months—for a fraction of the cost.
Bank financing is another common stumbling block. Many banks are reluctant to lend against goodwill or intangible assets. If a seller or inexperienced advisor tries to push financing through a bank unaccustomed to these transactions, the deal often falls apart. M&A specialists like CGK bring established lender relationships and the credibility to structure financing that will actually be approved, ensuring the transaction closes smoothly.
How CGK Protects Sellers
The risks of selling a business on your own can be daunting, but the right partner changes the equation. CGK Business Sales protects sellers by:
- Running a competitive, confidential sale process that attracts multiple qualified buyers.
- Accurately positioning the business by analyzing true earnings power, customer/supplier risks, and growth opportunities.
- Leveraging deep buyer and lender relationships to ensure terms are competitive and deals can actually close.
- Coordinating with experienced, M&A-focused attorneys and CPAs who know how to protect value rather than inadvertently stall or derail it.
Our role is to ensure that sellers don’t leave money on the table—or get trapped in a process that wastes time and fees without producing results.
From Risk to Reward: Why Professional Guidance Pays Off
Selling a business is usually the largest financial transaction of an owner’s life. The stakes are high, and the risks of going it alone are real. Overvaluing, undervaluing, exposing sensitive information, dealing with a limited buyer pool, and relying on inexperienced advisors can all chip away at value—or kill the deal entirely.
Professional guidance doesn’t just smooth the process; it can add millions to the outcome. CGK’s proven track record shows that the right process, the right buyers, and the right structure make all the difference. Instead of hoping the first offer works out, or trusting that your CPA’s spreadsheet will hold up under scrutiny, you get expert positioning, competition, and execution.
For sellers in today’s uncertain market, protecting value means not leaving the process to chance. Partnering with experts is not an expense—it’s the surest investment in turning years of hard work into a successful exit.
