If you’re selling your business for under £1 million, there’s a reason to avoid the high volume business transfer brokers!
Selling a business is similar to most things in life. If you’ve got the money, chances are you’ll get a better service and a better outcome. When it comes to selling a company below £1 million it’s often unlikely that a business owner will recruit a professional team to help with the sale. The process is long and the fees are high.Furthermore, the business owner wants to walk away with as much profit as possible!
That being stated, what kind of service does a business owner selling for under £1 million get? From what we’ve discovered it’s not very good at all – and worse, it can be very costly too. Not being an expert in this area, I contacted Andrew Weaver, the founder of SellMyBusinessOnline.co.uk to give us an insight on the market and what he’s doing to change the poor service levels and high costs that are currently on offer.
Joanna: Is it possible to get a high value service at a low cost?
Andrew: I have been involved in corporate deals for 10 years. Selling a business is rarely easy nor quick. The process is demanding of both seller and advisor with the result being that good quality advisors gravitate towards the size of deal and client that can justify their time and fees. As a very general rule, this tends to be businesses with turnover >£1m.
The vast majority of businesses fall beneath this radar and have traditionally instructed volume transfer agents who, because selling a small business can be challenging and time consuming, provide a service that is as much about protecting their time, as driving best value for the client. It’s a model based on committing sellers to exclusive contracts, high up front fees and/or large commissions at sale. Often, for little more than a matchmaking service. I founded Sell My Business Online to help those businesses with <£1m revenues and provide a better service.
Joanna: How have you successfully provided a high value service at a low cost?
Andrew: Here at Sell My Business Online what we’ve done is create a bottom up service by streamlining the process focusing on the high value unique elements of the process. We’ve removed the need for an exclusive broker contract, invited clients to build up the level of cost and expertise as relevant to their own particular sale process and provided a low cost access to the market via our marketing channels.
Joanna: Can business owners sell without a business transfer broker?
Andrew: Yes! Sell My Business Online is a marketing and sales ‘support’ service. We enable businesses to get to the market efficiently and cost effectively. There is no agents contract to sign and no agents commission to pay. Clients can purchase additional advisory services by the hour, if required. We can also step into a mandate at anytime, if the vendor feels out of their depth.
We don’t advocate a DIY service for all businesses. Many business require a much more detailed and sophisticated marketing approach but Sell My Business Online is ideal for the smaller business and straight forward deals.
Joanna: What advisory services do you offer and how much are they?
Andrew: Sell My Business Online is supported by MBA qualified team of corporate deal brokers: Daresbury Company Solutions.
We offer a marketing service at £95 and a £495 advisory service. Most clients start with our advisory service and build up the expertise as required, including using our more traditional advisory services which include buyer research, deal facilitation and mentoring.
Joanna: What are the top 3 tips for business owners looking to sell within the next year?
Andrew: 1) Good preparation makes all the difference. Try and sell close too or just after year end – all your numbers are fresh.
2) Don’t fix price expectations on pre-sale valuation or (worse) on what you need. Prepare well, have a good marketing campaign and the value will follow.
3) Be sympathetic to a buyers’ anxieties. You know your business inside out, the buyer doesn’t and buying a small business can be fraught with risk. The best deals come from parties who are open, communicative and understanding with each other.
So there you have it. It is possible to avoid poor service from high volume business transfer brokers and there are providers who specialise in the <£1m market with a more tailored and open approach allowing business owners to research the market first without having to commit to a broker and their fees. If you would like to know more about Andrew and his company visit SellMyBusinessOnline.co.uk
Joanna Miller, Co-Founder of Business Wand, helps business owners navigate their way through the start to finish process of selling a business. Her specialty is helping owners understand how to prepare and make the most of their business sale process to maximise their company’s value. To understand how you can sell your business quickly for the highest sales price, purchase her book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale”.