Best place/way to sell a business
- Thread starter jellipad
- Start date
I advise business owners who're selling their businesses and the uninformed approach is simply to stick an ad on Daltons, BusinessesForSale, Rightbiz etc.
That's completely the wrong move for most businesses. And I say that despite my many friends in Daltons and BusinessesForSale and the fact that I work closely with them.
For example, if the business is an accountancy practice ... there are 25 business brokers in the UK who specialise in accountancy practices and you're best off speaking with one of them rather than using a portal.
If it's a post office you're selling, the SubPostmaster magazine is the place (or Post Office Ltd's own listings which is where buyers go to buy a post office).
Some restaurants/pubs etc., work well at the portals, some don't, depending on various factors.
And if the business is a certain size you'd be crazy to list at any of those locations - you'll need an Investment Banker, or at the very least an M&A adviser or appropriate corporate finance specialist / business broker, to list in the databases used by Private Equity firms, institutional investors and the like.
And if you're using a broker, there are over 400 brokers in the UK as I've described in this article on my page, and over 1000 if you count other advisers. Not all of them are suited to all businesses.
Short answer: There isn't "one" best place.
That's completely the wrong move for most businesses. And I say that despite my many friends in Daltons and BusinessesForSale and the fact that I work closely with them.
For example, if the business is an accountancy practice ... there are 25 business brokers in the UK who specialise in accountancy practices and you're best off speaking with one of them rather than using a portal.
If it's a post office you're selling, the SubPostmaster magazine is the place (or Post Office Ltd's own listings which is where buyers go to buy a post office).
Some restaurants/pubs etc., work well at the portals, some don't, depending on various factors.
And if the business is a certain size you'd be crazy to list at any of those locations - you'll need an Investment Banker, or at the very least an M&A adviser or appropriate corporate finance specialist / business broker, to list in the databases used by Private Equity firms, institutional investors and the like.
And if you're using a broker, there are over 400 brokers in the UK as I've described in this article on my page, and over 1000 if you count other advisers. Not all of them are suited to all businesses.
Short answer: There isn't "one" best place.
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"internet based business"
Oh yeah, I forgot, internet properties! There are brokers who specialise in selling internet properties and a whole sector of buyers who buy just those (I founded a forum for these buyers many years ago). And there are dodgy places like Flippa where some of these properties are listed.
But using business brokers can be a very dangerous game. Business owners have lost their entire business from choosing the wrong broker, not negotiating the right terms or otherwise making mistakes with choosing /using brokers.
I do charge for professional advice in this area. When selling something valuable you don't go by gut feeling or what Steve down at the pub said. The more valuable it is the more the need for pro assistance.
However, I'll try to provide some quick 1-2-1 advice. I would need to know, at the very least, age of the business, turnover and (net) profit for last two years, domain name/s, ownership structure & country of registration for tax purposes.. You could PM it if you prefer or email me.
Oh yeah, I forgot, internet properties! There are brokers who specialise in selling internet properties and a whole sector of buyers who buy just those (I founded a forum for these buyers many years ago). And there are dodgy places like Flippa where some of these properties are listed.
But using business brokers can be a very dangerous game. Business owners have lost their entire business from choosing the wrong broker, not negotiating the right terms or otherwise making mistakes with choosing /using brokers.
I do charge for professional advice in this area. When selling something valuable you don't go by gut feeling or what Steve down at the pub said. The more valuable it is the more the need for pro assistance.
However, I'll try to provide some quick 1-2-1 advice. I would need to know, at the very least, age of the business, turnover and (net) profit for last two years, domain name/s, ownership structure & country of registration for tax purposes.. You could PM it if you prefer or email me.
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Hi @jellipad , I'm sorry to see the comments from @Clinton , who for the record has never had a working relationship with Daltons.
All I can say is that thousands of business owners choose to advertise on Daltons every year - we are the UK's largest business for sale marketplace and have been trading since the late 1860's. Please feel free to give us a call if you need any further help.
All I can say is that thousands of business owners choose to advertise on Daltons every year - we are the UK's largest business for sale marketplace and have been trading since the late 1860's. Please feel free to give us a call if you need any further help.
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O
oldoakey
Be careful as some agents will give you an over inflated price to get you signed up and then take a fee of several hundred pounds. The problem I encountered with this was as the price was so over inflated we had hardly any people interested.
The agent however had his money upfront so he didn't really need the business to sell to make a return. I would use sites like Daltons and Businessforsale who charge a listing fee, this can bring a stream of interested parties who are actively looking for a business like yours.
If you do decide to go with an agent then make sure you read through the the terms before you sign. Do not sign on the spot let them give there pitch then ask for a copy their terms so you can read through them and negotiate any alterations you may think are necessary.
Good Luck
The agent however had his money upfront so he didn't really need the business to sell to make a return. I would use sites like Daltons and Businessforsale who charge a listing fee, this can bring a stream of interested parties who are actively looking for a business like yours.
If you do decide to go with an agent then make sure you read through the the terms before you sign. Do not sign on the spot let them give there pitch then ask for a copy their terms so you can read through them and negotiate any alterations you may think are necessary.
Good Luck
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Hello. Before you make the decision whether to use a broker or not please contact me. PM if you prefer. I am a broker but happy to advise you in confidence and with no obligation. You can see my terms and fees and ponder them at your own pace. I also recognise that all businesses are different so will gladly tweak my terms to suit. I'm familiar with both online and bricks and mortar businesses.
If I think I can't assist I'll tell you. I'll try to give a realistic valuation.
If you do go the DIY route then the two biggest and best online resources are Daltons and businessesforsale.com. I use both sites and several others. Both charge a monthly fee and you will need to provide an NDA, prepare a full sales Memorandum and respond quickly and professionally to any interested buyers. Simply advertising is not the only way to attract buyers. You can also approach competitors and other matched trade buyers. Also consider approaching M & A companies who have retained buyers looking for acquisitions.
Good luck and if I can be of assistance I'd be glad to hear from you.
If I think I can't assist I'll tell you. I'll try to give a realistic valuation.
If you do go the DIY route then the two biggest and best online resources are Daltons and businessesforsale.com. I use both sites and several others. Both charge a monthly fee and you will need to provide an NDA, prepare a full sales Memorandum and respond quickly and professionally to any interested buyers. Simply advertising is not the only way to attract buyers. You can also approach competitors and other matched trade buyers. Also consider approaching M & A companies who have retained buyers looking for acquisitions.
Good luck and if I can be of assistance I'd be glad to hear from you.
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uksme, Wow! We've exchanged PMs about this today - and deleting long standing links you've got pointing to my site/s from Daltons won't change the advice I provide business owners - but let's continue to keep all that in PMs.
Anyway, for anyone else following this thread, I've exchanged emails with jellipad. Maybe he can update us at some point about whether that advice has been of any use.
If you're looking to sell, think out of the box. Create a buyer profile. Consider how best you can reach people who match that profile.
A bit of leg work can make a massive difference to the price you walk away with.
From what I know, KeithGreen is a good chap - and his fees are very reasonable compared with 99% of brokers out there - but I wouldn't recommend approaching "M&A companies" i.e. companies on the lookout for acquisition opportunities who've retained a deal sourcer / buy-side broker. I work with some of them (and am actually currently retained on some deal sourcing arrangements as my LinkedIn profile has been advertising the last few months). But we are paid by the buyers and have the buyers' interests at heart, not yours. Buy-side brokers exchange tips on "managing seller expectations", getting sellers to commit to a closed shop (exclusivity) long before they need to and otherwise hitting sellers on price or terms. They can play you like a fiddle. This is not the time or place for a long explanation of the arsenal of tricks available to buy-side brokers, but I wouldn't recommend that a first time seller deal directly with them (not that all buy-side brokers will deal directly anyway).
With sell side brokers, there are a lot of sharks about, but there are also some good guys. BusinessesForSale asked me to provide them regular material on M&A related matters. The last article I wrote for them was about choosing brokers. I used there the same accounting and post office example-industries I used above, but to explain different points. Hope some readers find the article useful.
Anyway, for anyone else following this thread, I've exchanged emails with jellipad. Maybe he can update us at some point about whether that advice has been of any use.
If you're looking to sell, think out of the box. Create a buyer profile. Consider how best you can reach people who match that profile.
A bit of leg work can make a massive difference to the price you walk away with.
From what I know, KeithGreen is a good chap - and his fees are very reasonable compared with 99% of brokers out there - but I wouldn't recommend approaching "M&A companies" i.e. companies on the lookout for acquisition opportunities who've retained a deal sourcer / buy-side broker. I work with some of them (and am actually currently retained on some deal sourcing arrangements as my LinkedIn profile has been advertising the last few months). But we are paid by the buyers and have the buyers' interests at heart, not yours. Buy-side brokers exchange tips on "managing seller expectations", getting sellers to commit to a closed shop (exclusivity) long before they need to and otherwise hitting sellers on price or terms. They can play you like a fiddle. This is not the time or place for a long explanation of the arsenal of tricks available to buy-side brokers, but I wouldn't recommend that a first time seller deal directly with them (not that all buy-side brokers will deal directly anyway).
With sell side brokers, there are a lot of sharks about, but there are also some good guys. BusinessesForSale asked me to provide them regular material on M&A related matters. The last article I wrote for them was about choosing brokers. I used there the same accounting and post office example-industries I used above, but to explain different points. Hope some readers find the article useful.
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- Original Poster
- #11
@KeithGreen - thank you for your kind offer. I will PM you some stuff either tonight or first thing tomorrow.
@Clinton Your advice has been very helpful (as has your free ebook!) and I am very grateful for this along with the direction you have pointed me in. Thank you again.
@Clinton Your advice has been very helpful (as has your free ebook!) and I am very grateful for this along with the direction you have pointed me in. Thank you again.
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@Clinton, well written and some sense here in an area where most protagonists are self interested and downright liars if not fraudsters.
You are correct about specialist trade publications and I cannot stress that enough. However, even within this strata, there are brokers who deal exclusively with businesses in that sector. These are often no better than the generalist and will rob and cheat you as soon as you sign up.
How do I know you may ask ? Well, I have bought and sold a lot of businesses across multiple sectors and I have had a number of agents offering to defraud sellers and more than one offering to defraud me when I posed, unknown, as a potential purchaser of my own business listed for sale.
The big things are upfront fees, which should never be paid and contracts and exclusivity which often extend way longer than they should and where you find sellers hit with claims for fees, which are supported by the courts, for sales where the original broker was not instrumental in finalising the eventual sale.
Within this you have a few good guys. A few is the optimum word. The majority are akin to life's failures who want to get rich quick for no work and little effort and who, like the boiler room salesmen (sic conmen) of SE Asia, will stop at nothing and tell you anything to part you from your cash.
You are correct about specialist trade publications and I cannot stress that enough. However, even within this strata, there are brokers who deal exclusively with businesses in that sector. These are often no better than the generalist and will rob and cheat you as soon as you sign up.
How do I know you may ask ? Well, I have bought and sold a lot of businesses across multiple sectors and I have had a number of agents offering to defraud sellers and more than one offering to defraud me when I posed, unknown, as a potential purchaser of my own business listed for sale.
The big things are upfront fees, which should never be paid and contracts and exclusivity which often extend way longer than they should and where you find sellers hit with claims for fees, which are supported by the courts, for sales where the original broker was not instrumental in finalising the eventual sale.
Within this you have a few good guys. A few is the optimum word. The majority are akin to life's failures who want to get rich quick for no work and little effort and who, like the boiler room salesmen (sic conmen) of SE Asia, will stop at nothing and tell you anything to part you from your cash.
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Thanks, Talay. As you have experienced, I too have had more success with specialist trade publications, both on the buy and sell side, than with portals.
There is one sentiment running through many of the threads here with which I disagree: The payment of an advance fee.
Disclosure: I charge an advance. Not just an advance - I charge my entire fee up front for whatever consultancy work I take on and it's not a small fee. If you want professional advice, you should be prepared to pay for it. If you don't .... someone else may be paying your professional to advise you. There's plenty of that about!
The larger the business the more the owners should be prepared to pay up front. For businesses of £5M+, and I've got three on my books now that I'm trying to match with the right brokers, there is no broker in the UK specialised in deal sizes of £5M+ who'll work without an advance. The likes of Evolution CBS, Bluebox, BCMS etc., charge £30K, £40, £50K and more. Oh, and don't forget the VAT on top of that. OK, £5M is a lot, but even go down to £1M (sale price) and you'd be wise to pay a flat fee to the right people for unbiased professional advice.
I may create a thread about advance fees if I get a chance.
Choose a broker based on reputation, competence, sector experience, fair contractual terms etc., meet / speak with them to find out what they're going to do for you, and how .... and then decide if you can live with his/her fee structure.
You're right about the mixed bag, but there are good and bad guys in both camps - advance fee and no-sale-no-fee.
There is one sentiment running through many of the threads here with which I disagree: The payment of an advance fee.
Disclosure: I charge an advance. Not just an advance - I charge my entire fee up front for whatever consultancy work I take on and it's not a small fee. If you want professional advice, you should be prepared to pay for it. If you don't .... someone else may be paying your professional to advise you. There's plenty of that about!
The larger the business the more the owners should be prepared to pay up front. For businesses of £5M+, and I've got three on my books now that I'm trying to match with the right brokers, there is no broker in the UK specialised in deal sizes of £5M+ who'll work without an advance. The likes of Evolution CBS, Bluebox, BCMS etc., charge £30K, £40, £50K and more. Oh, and don't forget the VAT on top of that. OK, £5M is a lot, but even go down to £1M (sale price) and you'd be wise to pay a flat fee to the right people for unbiased professional advice.
I may create a thread about advance fees if I get a chance.
Choose a broker based on reputation, competence, sector experience, fair contractual terms etc., meet / speak with them to find out what they're going to do for you, and how .... and then decide if you can live with his/her fee structure.
You're right about the mixed bag, but there are good and bad guys in both camps - advance fee and no-sale-no-fee.
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