Can anyone recommend a good company to sell my retail business?

[Mr Big]

I am selling my business but am bewildered by the lack of real choice out there for people who want to sell a business with a turnover that is less than £1m. There are plenty of websites out there promising the earth but they just seem to be conduits to advertise and re-advertise.

 

[John Hemming]

The difficulty is that quality assistance in this area is not cheap. A turnover under £1m might sell for as much as £1m, but probably won't. It depends really on the profit (once you take out to what extent you as the owner are part of the necessary operation of the business).

Smaller businesses tend to be more dependent on the owner of the business. That makes it really difficult to value as well.

I don't think you will find a solution to this.

 

[Maxwell83]

Do you have an idea of the value of the business?

 

[ChocolateChipCheeseCake]

can you give us more details of the business; industry; profit margins; pros/cons of current industry and plan.

 

[Chris Ashdown]

The first choice is to offer it to companies in the same area of commerce or those looking to move into that area, many printing companies are brought buy other printing companies for easy growth and economies of scale

This means you have to somehow let people know you might be for sale either by advertising it or more subtly buy word of starting rumours

 

[The Byre]

I am selling my business but am bewildered by the lack of real choice out there for people who want to sell a business with a turnover that is less than £1m. There are plenty of websites out there promising the earth but they just seem to be conduits to advertise and re-advertise.

At least you have realised that the UK business broker market is full of charlatans and cheats! So far, so good!

The next step is to read through this lot here http://ukbusinessbrokers.com/services/#diy from our good friend @Clinton who is taking time out for something, though we know not what! Probably winding up the rubber band that drives his Honda!

I did a couple of YT videos on the subject you may like to see. As @Chris Ashdown points out, you may know your buyer already. For example, I sold my news agency to my largest customer.

 

[Mr D]

You can try selling your business through one of the several methods open to you.
Try being the operative word. A chunk of businesses seem to remain for sale for years. Some appear to never sell.

You wanting to sell does not mean someone else has the skills and money to take your place. For a number of small businesses its not a business that is being sold but a job. In some instances a poorly paid job at that.

 

[Mr Big]

Thanks for your replies folks. FYI it is a retail business and the turnover is £140K and the NP is £30K. It is for sale at £75K. There is genuinely plenty of scope to increase turnover and profit.

 

[MBE2017]

Thanks for your replies folks. FYI it is a retail business and the turnover is £140K and the NP is £30K. It is for sale at £75K. There is genuinely plenty of scope to increase turnover and profit.

Is this after all salaries inc your own? Basically you are offering a job type opportunity, someone can buy their job. No offence intended by that comment.

As for your last line plenty of scope to increase etc, that can be said of any business and does not really effect the valuation in your sort of offering. Maybe you have a worker or manager who might be interested in buying it from you?

 

[Mark T Jones]

As you've identified, good, reputable brokers won't be interested as there is no real earning potential for them.

There are plenty of rogue brokers who will give you an absurd valuation in order to hook you with their dodgy contracts- you've done well to avoid them.

In reality, you are selling a lifestyle business which might well appeal to a coupe looking for a easier life (I'm well aware of the contradiction there, but it's still how a lot of these businesses are bought)

Location is key- not just footfall, but desirability - if you are in a lovely village you will be more attractive to lifestylers than if you are in a genetic high street

Like any sale, your best starting point is to identify your target buyer and put yourself in front of them

 

[Mr D]

Thanks for your replies folks. FYI it is a retail business and the turnover is £140K and the NP is £30K. It is for sale at £75K. There is genuinely plenty of scope to increase turnover and profit.

Pretty much every business ever sold has plenty of score to increase turnover and profit. You can get more for your business by using that scope yourself to increase turnover and profit. Until then ignore that scope, it should be irrelevant to buyers.

 

[John Hemming]

Thanks for your replies folks. FYI it is a retail business and the turnover is £140K and the NP is £30K. It is for sale at £75K. There is genuinely plenty of scope to increase turnover and profit.

With this sort of thing the value of the stock matters.

For example if I have 75K I can invest it in a company called Diversified Energy Company which pays an income of £7.5K pa and I don't have to do anything other than get the money.

The question then arises how much time you are expected to spend on the business. If all the salaries are covered and the only thing to do is hold board meetings then potentially there is a value, but otherwise it is likely to mainly be influenced by the value of the stock.

It is true, however, that this sort of transaction is not likely to be of interest to a broker.

 

[Guy Incognito]

This will - unfortunately - be difficult. What sector is it? At this sort of price it's likely to appeal to someone who knows the business so might be a competitor.

 

[Chris Ashdown]

Few I imagine in the retail sector have money to invest in buying other small companies and taking over leases etc

 

[pentel]

plenty of scope to increase turnover and profit

Then increase the turnover and profit to a level where you don't have to be involved in the day to day running of the business.

 

[The Byre]

Then increase the turnover and profit to a level where you don't have to be involved in the day to day running of the business.

This!

At the moment it very much looks as if you might be selling a job. The £30k NP has to happen all by itself WITHOUT the owner working in the company. Whoever buys your company will have to spend time and effort controlling and governing the company and that is going to cost them either money (that has to come off the £30k) or time.

 

[Mr Big]

Yes, what you are all saying makes a lot of sense. I am essentially selling a job. In my case the business is a franchise and it seems most existing franchisees sell out to other franchisees or employees. There seems to be little interest in the franchisee from outsiders, even though it is far more attractive than most franchise business models.

 

[The Byre]

I am essentially selling a job.

Does that mean that the £30k is what you earn and you do not take a wage on top of that?

If that is the case, then the company is essentially worthless, as any owner would have to put someone in to run the shop and would cost them £30k or more - in fact probably much more as they would have to have holidays, pension rights, maternity and sickness time, etc., etc., etc. Remember to add payroll taxes and employer's NI contributions.

 

[John Hemming]

The stock may have some value (but only at purchase price and possibly discounted).

 

[Energise Accounting]

Thanks for your replies folks. FYI it is a retail business and the turnover is £140K and the NP is £30K. It is for sale at £75K. There is genuinely plenty of scope to increase turnover and profit.

It is a job you are selling in my opinion not a business. The value of your business at best is F&F plus stock value.

 

[Mark T Jones]

Yes, what you are all saying makes a lot of sense. I am essentially selling a job. In my case the business is a franchise and it seems most existing franchisees sell out to other franchisees or employees. There seems to be little interest in the franchisee from outsiders, even though it is far more attractive than most franchise business models.

I think you have answered your question there

Have you discussed it with the franchisor? They will frequently want to be involved- it might even be a condition in the franchise agreement