If you ask a founder who's just sold their business what their broker did, the answer is usually vague. They marketed it. They found buyers. They helped with the paperwork. Pressed on specifics, most founders can't describe what actually happened between engagement and closing, because from their side it looked like a series of emails and meetings without an obvious shape.
That vagueness is the problem. Because behind those emails, there are two completely different processes that could have been running — one that produces a real outcome, and one that produces a listing on a website and a lot of waiting. From the founder's chair, they look almost identical until the results come in. By then it's too late to know what you paid for.
An X thread from a lower-middle-market M&A operator put it more directly than most:
Business brokers are killing deals and sellers don't even realise it. Most “processes” are just listings. Sellers can't tell the difference until it's over.
— X, mid-market M&A commentary
This piece is a plain-language walkthrough of what a real process actually consists of. Not to sell you on one — you can decide that for yourself. But so that when you interview advisors, you know what questions to ask, and you can tell the difference between someone who's going to run a campaign for you and someone who's going to collect a retainer and hope.
Stage one: preparation
Before any buyer sees anything, the advisor does the work that determines whether the rest of the process is even possible.
The financial pack gets rebuilt for an outside reader. That doesn't mean the numbers change. It means the way they're presented — the adjustments to normalised earnings, the treatment of one-off items, the reconciliation to the tax filings, the analysis of customer concentration and revenue quality — gets structured the way a buyer's team will want to see it. Most founders' books are internal-tool books. This step turns them into a document written for a skeptic.
The information memorandum, or IM, gets written. This is the document buyers will read first. A good IM is thirty to fifty pages, tells a specific and defensible story about the business, addresses the obvious concerns before the buyer raises them, and reads like it was written by someone who understands both the business and the buyer's questions. A bad IM is a marketing brochure, full of hockey-stick projections and adjectives, that any experienced buyer will discount within the first three pages.
The buyer list gets built. This is the part most founders don't realise happens. A serious advisor doesn't wait for buyers to arrive — they identify, name, and prioritise the specific companies and funds most likely to want this business, and prepare a targeted approach to each. For a mid-sized business in SEA, that list is usually somewhere between forty and a hundred and fifty names. Not “the market.” Named organisations, with named contacts, ranked by fit.
None of this shows up to the founder as visible activity. It's four to six weeks of quiet work before the first outreach happens. Advisors who skip it are usually the ones who are about to list the business on a marketplace and see what happens.
Stage two: outreach and interest
Once the pack is ready, the outreach begins — and here the real difference between a process and a listing becomes visible.
A listing works by publication. It goes on BizBuySell, or a regional equivalent, and waits for buyers to find it. The buyers who arrive are self-selected, which means the pool includes tyre-kickers, unqualified individuals, competitors gathering intelligence, and the occasional real buyer mixed in. The seller and the broker spend most of their time filtering.
A process works by targeted approach. The advisor contacts each name on the buyer list directly, under a teaser that describes the business without identifying it, and gauges interest. Buyers who want to learn more sign an NDA, receive the IM, and get invited into a structured next stage on a defined timeline. The pool is smaller but qualified from the start. The advisor is doing the filtering upfront, not passing every unqualified inquiry through to the founder.
Both approaches produce interested parties. The difference is what those parties look like. The listing produces a flow of low-quality inbound over months. The process produces a shortlist of qualified buyers within four to eight weeks, each of whom knows they're one of several parties looking at the same opportunity — which is the foundation of everything that comes next.
Stage three: indicative bids
This is the stage that separates real processes most clearly from everything else, because most listings never have one.
Once the qualified buyers have received the IM and had their questions answered in a first round of Q&A, the advisor sets a date by which they must submit an indicative offer. The offer is non-binding, but it specifies the price they're prepared to pay, the structure they're proposing (cash vs. earn-out vs. rollover equity), the conditions they'd want during due diligence, and the timeline they're working to.
Setting this deadline does two things. First, it forces buyers who were casually interested to either commit to the process or drop out — which cleans the list. Second, and more importantly, it creates the first moment of genuine competitive tension. Every serious buyer submitting a bid knows that others are submitting bids on the same day. That knowledge is what moves the market's real price toward the top of the range rather than the bottom.
A listing has none of this. Offers arrive whenever a buyer feels like making one, on whatever terms they choose, with no reference point for the seller to evaluate against. Which means the seller is negotiating one-on-one against every buyer, with no leverage other than saying no.
At the end of the indicative-bid stage, the advisor typically has three to five real offers on the table. The founder can now, for the first time, see what the market actually thinks their business is worth — not what one buyer is willing to pay, but what the qualified pool is willing to pay. That number is almost always different from the number in the founder's head, in both directions, and it's the number that matters.
Stage four: management presentations and deep diligence
Based on the indicative offers, the advisor and the founder select two or three buyers to move to the next stage. This is usually the point where the founder meets the buyers personally, presents the business in person or on video, and answers the harder questions.
The presentation is a specific artefact. It's not the pitch a founder might give to an investor — it's a working session with the people who might actually run the business afterwards. The buyers ask about the team, the customers, the operational realities, the risks the IM didn't cover. The founder's job is to answer honestly and confidently. This is where the “un-sellable seller” problem, if it exists, shows up — and where the founders who've been rehearsed by a competent advisor perform noticeably better than those who haven't.
After the presentations, the shortlisted buyers get access to a data room — a structured repository of the documents they'll need to make a final offer. Financial statements audited or reviewed, tax filings, key contracts, employment records, customer contracts, IP assignments, licences and regulatory documents. Building this data room is one of the more thankless parts of the process; incomplete or disorganised data rooms are one of the top reasons deals slow down or die in the final stages.
Diligence at this stage isn't the full audit that comes after signing — it's enough for the buyer to firm up their offer and produce a final bid.
Stage five: best-and-final, and exclusivity
With deep diligence complete, the advisor calls for best-and-final offers. This is the moment of maximum competitive tension in the whole process. Each remaining buyer knows they're competing head-to-head with a small number of qualified peers. Each one is deciding, with full information, what they'll really pay and what terms they'll accept.
The best-and-final bids typically improve materially on the indicative offers — often by ten to twenty percent on price, and sometimes more importantly, on structure. The buyer who was proposing 60% cash and 40% earn-out at the indicative stage may move to 80/20 to win. The buyer who wanted a two-year founder lock-up may cut it to twelve months. These structural improvements are often worth as much as the headline price move.
Once the best-and-final offers are in, the founder chooses. Not always the highest number — often the best combination of price, structure, buyer fit, and terms. This is the moment the buyer-selection thinking from earlier in the process pays off.
The selected buyer is granted exclusivity — a period, usually thirty to sixty days, during which they and only they can complete diligence and negotiate the definitive agreement. In return, they commit to the terms of their best-and-final bid as the starting point.
Stage six: signing and completion
The final stretch is the most well-known part of the process, and the one most founders picture when they think about “selling the business.” Legal counsel drafts the sale and purchase agreement. Confirmatory due diligence runs alongside. Warranties and indemnities are negotiated. Conditions precedent are worked through. If there's regulatory approval or third-party consent needed, that happens here.
Deals die in this stage sometimes — usually because something material comes up in confirmatory diligence that changes the buyer's view, or because the founder's response to a diligence finding damages trust. A good advisor spends this stage keeping both sides talking, managing expectations, and quietly steering around the small crises that inevitably arise.
Signing happens. Completion — the actual transfer of money and shares — follows either immediately or after conditions are met. And then the founder walks out into the year we wrote about last week.
The two costs, side by side
Here's the part that matters, because it's why this piece exists.
A listings-based broker and a process-based advisor charge roughly the same. Both typically charge a retainer up front and a success fee — often 8 to 12% of the deal value — on completion. The retainer might differ by a few tens of thousands. The success fee percentage might differ by one or two points. That's the cost gap.
The outcome gap is much larger. The listings approach, statistically, fails 70 to 80% of the time — the business never sells, and after twelve to eighteen months the founder either takes it off the market or accepts a rescue offer at a heavily discounted price. When it does sell, it usually sells to the first serious buyer, at a price with no reference to what the wider market would have paid.
The process approach, when the business is genuinely sellable, closes in three to nine months at a price and structure that reflects real competitive tension. The deals that close through this route tend to see final prices ten to thirty percent above the indicative bids, and materially better structure — more cash up front, shorter earn-outs, cleaner terms.
That's the trade-off, in the plainest terms we can put it. Roughly the same cost, dramatically different outcomes. The founder's job, at the point of choosing an advisor, is to ask enough questions to know which one they're actually hiring.
What to ask before you sign an engagement
If you're interviewing advisors, four questions separate the two categories quickly.
- How many buyers, specifically, are you planning to approach on my behalf, and who are they? A real process advisor will have started to build the list before you sign, or will tell you exactly how they'll build it. A listings broker will talk about “putting it in front of the market.”
- What does the indicative bid stage look like in your process? A real process advisor will describe it in detail — the deadline, the structure, the way competitive tension is managed. A listings broker will not have one.
- Can you show me a redacted example of an information memorandum you've produced? A real process advisor will have a stack. A listings broker will send you the marketing template they use for every listing.
- What percentage of businesses you engage with do you decline to represent, and why? A real process advisor turns away most of the businesses they see, because they only take mandates they can actually deliver on. A listings broker takes almost everything, because their model depends on volume.
The answers to those four questions will tell you, within an hour, which category the person in front of you is in. And that hour is worth more than almost any other hour you'll spend in the sale process.
If you're evaluating advisors — or you've already engaged one and something about how the process is unfolding doesn't quite feel right — a second opinion is worth having. Not to poach the mandate, but to help you understand honestly what you're paying for and what you should expect. Book a private consultation and we'll walk you through what a real process looks like, and whether the one you're in resembles it.
A note on the sources
The observations in this piece draw on public discussions across r/smallbusiness and r/businessbroker, X threads from lower-middle-market M&A operators, and PaperToaster's own advisory experience. Quotes are lightly edited for length.