Making the decision to sell your business is a big step. The next hurdle to negotiate is often the most difficult one, though: how to market your business to the right buyers so you can achieve the best sale price in the shortest possible time.
Once upon a time, a prospective vendor’s first – and often only – port of call would be their local business transfer agent but the advent of online listings like Bizdaq means that business owners can now pick the route to market that best matches their needs – and their budget.
One of our most frequently asked questions is: ‘how much will it cost to sell my business?’. There’s no one-size-fits-all answer to this, as it will very much depend on the route you take, how much professional support you need along the way and how involved you are prepared to be in the sales process.
Agent versus online
If you’d like to completely delegate responsibility for selling your business to a seasoned professional, then you should probably consider commissioning an experienced agent. We’d always advise vendors to go down this path if they run a large or complex business – with multiple locations, perhaps – that requires the services of a specialist team.
Alternatively, if yours is a small business – turning over, say, less than £2m – you might well be tempted by the huge time and cost savings you could make by using an online service. Granted, an agent will do all the legwork for you, including liaising with potential buyers and negotiating a price but it will cost you dearly.
Business transfer agents
It’s worth knowing that business transfer agents in the UK don’t have to be licensed, so you should definitely invest time researching the market before appointing an agent – ask trusted business contacts for a recommendation if you can. A good agent will know the local market intimately and will possibly have experience in your business niche. Make sure you’ll be receiving a complete service, not just an advert and basic prospectus with the all the other arrangements left up to you.
In general, agents will work to an agreed fee structure which will vary from practice to practice. Some will work on a commission-only basis, taking their fee (usually around 8-10% of the sale price) when the business is sold. Others may ask for an upfront fee to cover research and marketing expenses, with a final commission payment due when the deal is complete. On larger deals, agents often ask for a monthly retainer in addition to the closing commission.
A bona fide transfer agent will have a solid track record and will be happy to supply references when asked. Beware of rogue agents who may tout for business using so-called ‘rat trap’ contracts that tempt vendors with unrealistically high valuations and commission-only rates but that can include small-print clauses with hefty penalties for early termination of the arrangement. As always, it pays to do your homework and to treat too-good-to-be-true offers with caution.
Interactive online sales listings
An online-only operation like Bizdaq is the ideal solution for the sale of smaller businesses (where the cost of selling through an agent can be proportionately more) and for entrepreneurially minded owners who prefer to be more involved with the sales process. By taking the more direct approach, these vendors can not only look forward to saving tens of thousands of pounds on agent fees but also have more control over negotiations, which often results in a quicker sale.
Creating a Bizdaq business-for-sale listing is a piece of cake and there are plenty of online resources available to advise on how to make your presentation more impactful. The seller dashboard allows you to respond to requests to view and to manage offers swiftly and simply at any time of the day. Bizdaq’s owncalculates a fair market value based on your location and business type as well as an in-depth assessment of comparable businesses sales, together with your own income and cash flow figures.
You can browse a, together with accompanying prices and choose the one that best suits your situation. We work on a fixed-fee basis, so there’s no commission to pay at any point. Price start from just £65+VAT per month, based on our most popular plan which runs for six months and includes a host of extras including professional photos, sales brochure and sales documents, as well as a featured listing (total value £235).
Remember that your business sale may be liable for tax, depending on your circumstances: we recommend seeking advice from a trusted accountant with commercial contract experience. You’ll also need to prepare your paperwork – tax returns and audited accounts – ready for prospective buyers to view. Make sure you factor in any additional costs for offline legal and accounting services.
Posted on December 13, 2018 | sell a business, selling, how to sell a business