One of the biggest misconceptions in business acquisition is that first-time buyers should focus primarily on finding off-market deals. While off-market acquisitions certainly have their place, we've found they're rarely where first-time buyers have the greatest success. In our experience, roughly 80 to 90 percent of the first businesses we acquire with our operating partners come from the brokered market. It's only after someone owns a business that off-market opportunities begin to make up the majority of additional acquisitions.
Brokered versus non-brokered
Part of the confusion comes from the terminology itself. I actually don't like the phrases on-market and off-market. There really isn't a centralized market for buying small businesses. A better distinction is brokered versus non-brokered. If a business is represented by a broker, it's part of the brokered market. If the owner is selling directly, it's non-brokered. That's a much more accurate way to think about it.
Many people assume non-brokered businesses are automatically better opportunities because there isn't a broker involved. In reality, we've often found the opposite. Strong businesses frequently hire brokers because they meet the size, profitability, and quality standards necessary for professional representation. Many businesses being sold directly don't meet those standards, which is one reason they never make it to a broker in the first place.
Another common belief is that off-market businesses can be purchased more cheaply. Again, that hasn't been our experience. Owners who haven't received professional guidance often have unrealistic expectations about what their businesses are worth. Because they haven't been educated on market valuations, they frequently overestimate the value of what they've built. While it's certainly possible to find exceptions, we generally see more realistic pricing on brokered transactions because sellers have already been through the valuation process with an advisor.
What the data shows
In one survey of more than 300 completed acquisitions, only a small percentage resulted directly from cold outreach. The majority originated through online marketplaces or broker relationships. While people often promote cold outreach as the best path to buying a business, the actual number of completed transactions suggests otherwise.
One reason brokered marketplaces like BizBuySell receive criticism is that most buyers never make it past the first stage of the process. A typical listing may receive 100 to 200 inquiries, yet only three to five buyers are introduced to the seller. Many people conclude that the marketplace itself is the problem when, in reality, they're struggling with credibility rather than deal flow. Brokers aren't withholding opportunities arbitrarily — they're filtering for the buyers they believe are most likely to close the transaction and successfully operate the business afterward.
That's why your goal shouldn't simply be to request information about a business. Your goal is to convince both the broker and the seller that you're the right person to own it. The buyers who consistently make it through the screening process aren't necessarily the wealthiest or the first to inquire. They're the ones who can clearly explain why their experience, background, and operating plan make them the best steward for that particular company.
The broker becomes your ally after the LOI
Another advantage of the brokered market is what happens after you sign the Letter of Intent. Many buyers view the broker as an obstacle during the search process, but once you're under contract, that broker often becomes one of your greatest allies. They help manage the seller's emotions, keep both sides engaged, and guide the transaction through inevitable challenges. Without that intermediary, deals are much more likely to stall or fall apart because there's no neutral party helping everyone move toward the finish line.
Where non-brokered deals shine
This doesn't mean you should ignore non-brokered opportunities. In fact, once you own a business, those opportunities become incredibly valuable. Existing owners naturally receive acquisition opportunities from competitors, suppliers, customers, and others in their industry. Many of those businesses wouldn't make sense as standalone acquisitions for a first-time buyer, but they can become outstanding add-on acquisitions that strengthen an existing platform. That's why roughly 80 percent of our bolt-on acquisitions come from the non-brokered market rather than traditional listings.
While you’re searching, don’t rely exclusively on online listings either. Continue building relationships in places where business owners naturally gather. One of our favorite recommendations is joining a local Rotary club. Rotary tends to attract established business owners who are nearing retirement, making it an excellent place to build genuine relationships with potential sellers. In our experience, it often provides better networking opportunities than organizations with younger, employee-heavy memberships, though that can vary by community.
The biggest takeaway
Don't let the pursuit of the perfect off-market deal keep you from buying a great business. Most successful first-time buyers acquire their companies through the brokered market. Focus on becoming the type of buyer brokers want to introduce to sellers, build credibility, and close your first acquisition. Once you're an owner, you'll discover that the best off-market opportunities often come looking for you.
About the author
Mark Fleming, CFA, FRM
Mark Fleming is the co-founder of Owner Actions, where he partners with experienced operators to acquire and grow small businesses. He has participated in more than 40 business acquisitions and has evaluated thousands of businesses across dozens of industries. Drawing on a background in portfolio management, financial analysis, and business ownership, Mark helps entrepreneurs identify high-quality acquisition opportunities and build businesses for long-term success.