Why the Traditional Business Sale Model Fails Modern SMEs

The retirement plans of many business owners are at risk because of a simple assumption: that selling your business for a sufficient price, in a timely manner, is straightforward.

Most owners assume the process will be measured in months, when in reality it takes years of preparation. And because most owners — and often their long-standing trusted advisers — have never sold a business, they rely on outdated ideas that often prove fatal:

• Buyers are plentiful and rational.

• Banks will readily fund a purchaser.

• The business can be quickly “tidied up” for sale.

• Advertising will deliver the buyer leads.

For modern, non-main-street SMEs, this thinking is flawed.

The traditional business broking model is simply not designed for businesses where value lies in intellectual property, client relationships, and team expertise.

Where the Traditional Model Works (and Where It Doesn’t)

The conventional broker-led process may suit small hospitality venues, retail shops, and franchises. But for professional services, tech, healthcare, creative industries and knowledge-based businesses, the old playbook rarely delivers.

Here’s why — and what owners really need instead.

1. Off-Market Sales Aren’t “Brokered” Deals

More and more valuable sales happen quietly — to a competitor, existing partner, management team (MBO), or staff (via employee ownership). These are often golden opportunities: quicker, less stressful, and delivering stronger value.

The problem: Turning a natural off-market offer into a public broker-style process usually scares away the right buyer.

What’s required: Specialist advisory support to handle internal dynamics, preserve trust, structure finance and earn-outs, and keep the business humming during the transition.

2. Generic Advertising Doesn’t Reach the Real Buyer

Advertising on business-for-sale websites and waiting for the phone to ring is a slow death for non-main-street SMEs.

The problem: Generic public listings rarely attract the strategic or “natural” buyer prepared to pay a premium.

What’s required: A targeted, discreet approach combining the owner’s industry insight with research and quiet conversations — without signalling distress or giving buyers unnecessary leverage.

3. Pricing is Flawed and Static

It’s hard to get quality data on SME sales. Too often, brokers inflate asking prices to secure a listing or apply simplistic multiples that don’t reflect the real value to a specific buyer.

The problem: Overpricing wastes time, erodes credibility, and poisons the well.

What’s required: A defendable, buyer-specific valuation tied to how the acquisition diversifies or grows the buyer’s business. Premium pricing is achieved through preparation and flexible processes like Expressions of Interest (EOIs).

4. Success Fees Are Misaligned

Traditional commissions of 6–12% (with $25k+ minimums) don’t fit smaller SMEs — and can distort incentives.

The problem: Brokers are rewarded for the quickest sale with the least upfront work. Owners with smaller but valuable businesses may delay or abandon selling altogether.

What’s required: Advisory models that align with the owner’s needs — pay-as-you-go advice, project fees, or retainer models — so they can access expertise without disproportionate costs.

What Owners Really Need

At the root of this mismatch is a misunderstanding of what owners are actually buying. Most don’t need a broker; they need a mix of:

• Business coaching to lift performance now.

• Mentoring to navigate personal and emotional decisions.

• Exit planning that starts years before a sale.

• Tailored advice on structuring deals and engaging the right buyers.

Paying for staged advisory support by the hour, on retainer, or by deliverable gives owners more control, better outcomes, and ultimately higher value when the right exit arrives.

Final Word

Traditional broking is not “bad” — it just wasn’t built for the majority of modern SMEs. If you’re running a professional, knowledge-based, or people-centric business, you need more than a listing and a commission-driven deal. You need a strategy that’s as unique as your business — and buyers who value it for what it really is.