30/01/2007 by info.

I can fully appreciate how business owners want to get the best price for their business when they want to sell.  After all, it is often the second highest transaction, in terms of value, they will have in their life, behind selling their house.

What I find strange is when selling a business, owners often loose their business acumen.  Let me explain.

In the UK there are business transfer agents who “buy a listing”.  And what I mean by that is to over value a business in the hope that the owner will instruct them.  Small businesses simply do not sell for 3.5/4 times profit in the UK, however owners are fooled time and time again into instructing the agent who tells them it is worth the highest figure.

I will not mention any names however if anyone would like to make comments they are welcome to do so.  Needless to say these agents are the ones with glossy marketing material and, here is the punchline, want a large upfront fee before they will take the business on their books.

Amazingly, business owners pay this fee often over £1,000 again and again.  The irony is that this money pays for the glossy material that fooled them, and it also means that the agency is making enough money so that they do not actually have to sell the business they have just been instructed to sell.

The fact is small businesses are valued at around 1 and 2 times profits depending on the individual circumstances of that business. 

And when the owner is desperate to sell because they have wasted 2 years of their life with this agent, they reduce the price dramatically down, incidently to either the market value or even below.

So if you are a business owner wanting to sell your business, keep your business acumen, and learn your businesses value before you instruct an agent, you could save yourself a lot of pain and money. 

Posted in Business transfer agents | No Comments »

11/01/2007 by info.

So interest rates have risen in the UK for the second time in 6 months, but what does this mean if you are either trying to sell your business or are thinking about it.

What it means to the general population is that because it will cost them more in debt repayments, the general population will have less disposable income to spend in your business.  Possibly therefore your turnover and profits will be lower, lower profits equal a business which has lower goodwill and is worth less.

Secondly for the person interested in buying your business, it will cost them more to borrow money.  As they can no longer afford the higher price due to higher debt repayments, they will be more likely to offer a lower price for your business.

Thirdly, a lot of business purchases have recently been financed by remortgaging property, higher interest rates mean lower house prices and less equity to buy your business.

So what does it mean to you?  Well it’s bad news as it means that you may, after today, have a business worth less, and if you want to sell, you may have to be more realistic with your price expectations, or run the risk of not selling at all.

Posted in The Economy | No Comments »

08/01/2007 by info.

Welcome to Vandervells News, an informative and hopefully interesting news diary for Vandervells Business Transfer Agency in the counties of Suffolk and Essex.

You can find the Vandervells website at http://www.vandervells.com/

I have been a business transfer agent since 1999, previously trading under and owning a licence with Lakey & Co.  Having moved to the Suffolk/Essex border I decided to open a new area for Vandervells.

Vandervells if you didn’t know are perhaps the longest established business transfer agency (BTA) in the country, the proprietor Geoff Van Der Velde, having sold businesses all his life.  I am happy that no one in the country knows more about selling businesses than Geoff, and am hopeful of a long and sucessful relationship.

This blog will provide news about Vandervells and the market for selling businesses which I hope will be useful to those of you who are thinking about using a BTA.

Posted in General | No Comments »