On-Market vs Off-Market Deal Sourcing: A Guide for SMB Buyers

Here's a window into how competitive on-market deals really are: Active brokers regularly field calls from five or more searchers in a single week, all asking about the same listing. When something clean and fundable appears in the lower mid-market, everyone sees it at once. And if that's your only pipeline, you're one of a dozen buyers trying not to overpay.

The buyers who close, build a blended pipeline. They cultivate off-market relationships for value and structure, while tracking credible on-market deals for speed and throughput. You don't earn returns by having opinions about channels. You earn them by completing sensible deals.

The real trade: speed vs value

On-market deals exist to compress time. A decent broker has packaged the story, prepped the seller, and put guardrails around process. If the numbers hang together and expectations are grounded, you can move quickly. The prep work is done. The seller knows they're selling.

Off-market is different. You're doing the work the sell-side didn't do. More legwork, more "not yet" conversations, more months of cultivation. In exchange, you often get better entry multiples and friendlier structures. Sellers haven't been primed to expect 100 percent cash at close. You can talk about transition, risk sharing, and what "good" looks like for both sides.

Neither is a free lunch. Brokered processes can drift into bidding wars. Off-market can take months to warm from curiosity to commitment. The point is to decide what you're optimising for: raw pace, price discipline, or both.

Size changes the game

As EBITDA grows, so do expectations and multiples. If your target zone is the classic SMB band - say, £1-4M EBITDA - here's what you'll see:

Self-funded searchers and independent sponsors buying at 3-5x EBITDA, depending on size and quality. Lower mid-market buyers willing to pay 6-8x for businesses in good order. If you bought right and tidied the operations, that spread is where your return is born.

This matters for channel strategy. Below £2M EBITDA, most of your best deals come from owners who've never talked to a broker. Above £5M, that flips. The higher you fish, the more likely you encounter organised, brokered processes. Downmarket, off-market patience pays.

How broker fee structures drive behaviour

Unrealistic seller valuations are the downfall of many sales. Those inflated expectations come from somewhere. And while the best brokers add real value (and there are some great brokers out there!), many don't. The market splits into three types:

Volume listers: Hundreds (or thousands) of deals, light touch, listing fees over completion fees. They'll introduce you and step aside. You'll get conversations but not always clarity. Expect to do the groundwork yourself, and don't be surprised when the seller shows up to calls alone.

Micromanagers: Small caseload, high fees (5-7% on success), heavy control. They manage two deals at a time and need both to close at premium valuations. Of course they squeeze. They'll write your heads of terms, push for fixed high valuations decoupled from multiples, and keep negotiating past the deal's breaking point. It's rational for them, even when it kills your deal.

The middle ground: Experienced, pragmatic, outcome-focused. Enough structure to maintain momentum, enough humility to let buyer and seller build rapport. They do a handful of deals a year but care deeply about each one. When you find these people, stay close.

The economic reality shapes behaviour. Understanding fee structures tells you how a process will run. With micromanagers, anchor feasibility early and protect your red lines. With volume listers, expect to lead. With the pragmatic middle, let them help.

Why off-market deals take longer - but trade better

On-market sellers have usually been coached on what lenders accept, which KPIs matter, and where problems hide. That prep shortens diligence and raises expectations. It also creates a pattern: buyers over-promise at heads of terms to win exclusivity, then claw back during diligence when reality hits. The seller's already counting money they haven't seen. The deal unravels.

Off-market sellers often haven't packaged anything. That's inconvenient and valuable. You see the business before the window dressing. You can stage the conversation: light pre-diligence under NDA, review management accounts, then sensible heads of terms. It takes more human work. It also builds trust that survives legal diligence.

Here's what deal fatigue actually looks like: You're three months into diligence. The broker wants to renegotiate deferred consideration for the fourth time. The seller's exhausted. You're exhausted. The numbers still work, but everyone's tired. The deal dies not because the fundamentals changed, but because the process bled out momentum.

Competition is real - plan for it

There are only so many clean, fundable SMB deals in any given month. When one appears on-market, dozens see it at once. Pressure to stretch follows. Sometimes the prize deserves it. Often it doesn't.

Your off-market pipeline saves you here. When you have five warm conversations progressing, you can walk away from beauty contests that have gotten frothy. Optionality is an antidote to bad decisions.

What we actually recommend

Run two lanes deliberately.

Lane 1: Off-market, every week. Build a list, send thoughtful outreach, track seller intent. The goal is conversation quality and compounding trust. Timing is the biggest unknown, but keep nudging. Getting to conversations can happen in months. Getting to a deal takes a year or more.

Lane 2: On-market, with filters. Curate a small panel of credible brokers - the pragmatic middle. Review new listings with discipline. If something fits your thesis and passes first principles, move quickly and professionally. Don't doomscroll marketplaces for kebab shops.

Stay disciplined about pipeline maintenance. The searches that fail are the ones who get two heads of terms and stop prospecting. Then both deals die and they're back at zero. The searches that close keep deal flow moving even when they're deep in diligence. More conversations mean more options. More options mean better decisions.

When you're on calls, listen more than you sell. Calibrate the seller's readiness. Note deal-breakers early. If mutual interest exists, swap a clean NDA and one small information pack. Give a range, not a hostage number. Protect momentum by keeping stakeholder counts low and having real conversations when tension appears. Know your red lines before you write heads of terms.

Where we land

Go proprietary for price discipline, structure, and relationship depth. Watch brokered deals to keep throughput up and timing luck alive. The winners aren't romantics about channels - they're pragmatic about options.

The searches that close aren't the ones with perfect strategy. They're the ones who stayed in motion when deals died, kept five conversations warm while negotiating heads, and didn't put all their hope in any single opportunity. Build your optionality. Protect your momentum. Finish the deal.

Ready to build your blended pipeline? Try BizCrunch free for targeted off-market search with credible on-market listings in one workspace.

Want to go deeper? Listen to the full conversation on The M&A Zing podcast, where we break down broker types, deal flow reality, and when to walk away:

FAQ: On-Market vs Off-Market Deal Sourcing

What's the difference between on-market and off-market deals?
On-market deals are listed with brokers and include prepared information packs and data rooms. Off-market deals come from direct outreach to business owners who haven't formally listed. On-market moves faster; off-market typically yields better valuations and structure.

Which approach is faster?
On-market deals move faster because sellers are prepared and coached. Well-brokered processes can close in 6-9 months. Off-market deals take 12+ months on average due to relationship building and exit preparation.

What EBITDA multiples should UK SMB buyers expect?
Self-funded searchers and independent sponsors typically pay 3-6x EBITDA for businesses under £4M profit. Lower mid-market buyers pay 6-8x for larger, cleaner companies. [Source: market observation across UK dealflow]

How do broker types affect deal outcomes?
Volume listers provide introductions but limited support—you'll lead diligence. Micromanagers control every step and push for maximum seller value, often creating deal fatigue. Pragmatic independents balance momentum with outcome and typically close more deals.

Should I focus on on-market or off-market sourcing?
Use both. Off-market builds your price discipline and deal structure advantage. On-market maintains throughput and timing optionality. Successful searchers run parallel pipelines to avoid desperation bidding.

How long does a typical UK SMB acquisition take?
From first conversation to close: 9-12 months for on-market deals with momentum, 12-18 months for off-market. Keep multiple conversations live throughout—deals die regularly and pipeline prevents starting from zero.