Sell business broker

[PCLTD]

Hi everyone,


I am looking for some advice on a business broker, I am selling my established ecommerce company and have received a couple of valuations this week so I know what I would like to ask. I have narrowed it down to 2 brokers however one is asking for £900 up front, the other works on commission only but slightly higher commission.

The second broker firm seems a lot more no nonsense and he's not beating around the bush where as the first seems a little bit like a used car sales pitch!

Anyway, before I dig deeper can anyone recommend a company/broker, ideally one with no upfront fee.

I am looking to advertise next month so not wasting anyones time. I would also prefer the broker route rather than privately.

Thanks in advance.

 

[Mr D]

What size turnover business?

 

[Mark T Jones]

@Clinton does a bit of business booking

 

[Clinton]

Thanks, Mark. I don't actually sell business, I just help other people find the right business broker.

@PCLTD , without even knowing your numbers I would say this is probably way too small for me to assist. If you think £900 is worth mentioning you won't like my quote of thousands of pounds just to find you the right broker / advisory firm / nomad who'll charge you no less than £30K or £40K in advance fees.

I am selling my established ecommerce company and have received a couple of valuations this week so I know what I would like to ask. I have narrowed it down to 2 brokers ...

You've spoken with two brokers and got a couple of valuations? Throw those valuations away!

The broker's job is to flatter you and get you to sign up! The chances of your business getting anywhere near the broker's valuation is close to zero.

Let me repeat, close to zero. Even with the no-advance-fee broker.

But I know the sale and valuation of ecommerce businesses (probably better than any business broker you'll find in the UK). If you care to provide details publicly here I'll answer with some kick ass data / information. Most of the "website brokers" out there are people I helped get started in their business!

Anyway, before I dig deeper can anyone recommend a company/broker, ideally one with no upfront fee.

Being a tightarse is not a good policy. Pay well, get good advice, get competent professionals.

Why is it that owners of small businesses are so thick as to want to take no risk when hiring talent? Jesus Christ!

I'm the sole UK authority on business brokers. I know more about brokers that anyone you'll find anywhere. That's my day job and I'll tell you one thing clearly: The worst business brokers in the UK - the pathetic, useless ones, the crooks who'll screw you for tens of thousands of pounds even without selling your business - are brokers who charge no upfront fees.

If you can't pay a few thousand pounds - no, not chickensh*t £900 - for a good business broker, don't frigging hire one! If you're serious about finding the right broker, go to my National Directory of Business Brokers and spend a couple of weeks doing research on the brokers listed there.

Or spend a couple of days on my info site and learn about business brokers.

 

[PugwashEQ]

The broker's job is to flatter you and get you to sign up! The chances of your business getting anywhere near the broker's valuation is close to zero.

Let me repeat, close to zero. Even with the no-advance-fee broker.

Oh Clinton you cynic....

true though.

None of our clients get anywhere near our valuation.....they always over achieve......

OP I'm a sell side M&A Advisor (a business broker for larger businesses)- Clinton Lee has a good handle on the UK advisory market, so is well worth getting some info from him. His website has a veritable trove of information (some of it is only relevant to smaller businesses, but its all pretty much spot on)

The biggest problem you have is that you don't know the questions to ask....which is understandable, how many people sell more than one or two businesses in their lifetimes? not many! The information is out there to educate yourself......and it is WELL worth taking that time.

What you are buying when you buy a broker is skill, experience, resource and ability. Nowadays there are so many databases out there that there is vanishingly small advantage with going to someone that "knows the buyers". Go with someone who has transacted in your marketplace and can prove it ("how many clients have you had in the past 36 months in my space?", "how many of those did you sell?"- get a direct answer, then ask for the names of the clients.....then phone them.....as an example I am happy to supply a list of every clients we've ever worked with for a reference- whether they sold or not....). As an example, we sell the UK's largest pharmacy chains- we do a couple a year. We would be worse than useless trying to sell an ecomm business as we know nothing about that sector- in reality we would commercially damage your business in all likelihood.

Also go with someone that understands the importance of two things- trust and momentum. The absence of either will make transactions very hard.

As an aside, there is a very very good chance that Entrepreneurs relief will change/be removed in March 21's budget. There's a reasonable chance that CGT in its entirety will change. This means your tax may rise from 10% on the first million (and 20% on anything over) to 40% on the whole lot. If you are thinking of exiting, then getting on with it right now might be a great idea. We have heard these stories before, so it might not be catastrophic, but its worth factoring it into your thinking.

 

[Clinton]

Good advice.

What you are buying when you buy a broker is skill, experience, resource and ability.

And time!

People tend to not stop and think about what work is actually involved in selling a business and how much of time it takes.

It could be hundreds of hours worth of work!

Why would anyone in the right mind put in that kind of time/effort when you can change your mind about selling one day, or hold out for a silly price? He'll never get to see his success fee.

 

[PugwashEQ]

That's very true....but you you know as well as I do that there are some brokers who could give you thousands of hours, and you'd still be in the shit......or perhaps even deeper in the doodoo than when you started.....

I'm waiting for the day when the M&A world comes up with the wheeze of working on the clock- god knows how much we'd have to charge. We did a transaction a while ago where the prep phase alone would have been £150k or so on the clock.....we charged £31k and bought in some other experts that got the bill to mid 40s....