Can I buy a business without a broker?

BDC’s steps for buying a business tell buyers to tap their business network, industry contacts and advisors to identify candidates, and one BDC director calls speaking to sellers directly one of the best approaches to an acquisition. A broker is not a step in that list. What changes without one is who does the work: you run the search and the conversations, and your own advisors handle the legal and financial side.

What you take on yourself

BDC says anyone buying a business needs trusted legal and financial advisors to call on, and that terms with external experts should cover retainers and fees, conditions of success, confidentiality and conflicts of interest. It also says signing non-disclosure agreements encourages frank discussion once a sale becomes more realistic. BDC notes that a letter of intent can bind the parties on confidentiality and exclusivity where it says so, so have your lawyer draft or review it.

When a regulator is involved

In some businesses a regulator has a say in the change of ownership. RIBO, which licenses insurance brokerages in Ontario, says two key regulatory provisions arise when a brokerage changes ownership, including that the brokerage must stay trust positive before and after the sale, and it recommends consulting legal and accounting specialists. Other provinces and other industries have their own regulators and rules. Ask the regulator what a buyer must do before you sign anything.

If the owner already has a broker

If the business is already listed, the owner may have signed an agreement that affects how you approach them. Ask the owner whether the listing agreement limits direct contact, and have your lawyer confirm before you make an offer. Our page on what a broker listing agreement contains lists the terms that matter.