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The Truth About Business Transfer Agents
If you want to sell your business who do you approach? That’s the burning question. The simple answer is that you should always ask other business owners for recommendations, they know the truth about agents either because they have bought a business via an agent an know how they were treated or have used an agent as a seller. What if you don’t have a recommendation, how do you know which agent to choose. It’s a difficult one, however it isn’t necessarily the right choice to use the largest Business Transfer Agent in the country. Why? Firstly if an agency lists 7,000 businesses how much time are they actually devoting to selling your business. Do the maths. They will pick up your file together with the files of 35 other businesses on on 6 March 2007 (a total of 15 minutes in a year), assuming they work though all their clients and give equal time to all clients, it will be a year before they devote another 15 minutes to selling your business. But you say they have become the largest so they must sell businesses. Perhaps they sell a few but as a percentage it will be very small perhaps 1 - 2%. So how do they get the money to continue trading? The truth is that they spend all their resources not on selling your business but on obtaining new instructions. Their listers are instructed to obtain £1,000+ in upfront fees for every business they gain the instruction. And the punchline is that their listers get paid a large percentage of this £1,000 which goes straight into their pockets rather than into selling your business. The rest into supplying glossy marketing material. How do they pursuade business owners to part with this money? Well they over value your business, and tell you that your business is worth twice as much as is really is, and of course they are the largest business transfer agent in the country so they know what they are talking about don’t they. They know how to grow their business at the expense of their customers that’s all. Who am I talking about? Just look at Dalton’s Weekly magazine and you will know. DO NOT BE FOOLED!
One Response to “The Truth About Business Transfer Agents”Leave a ReplyYou must be logged in to post a comment. |
04/08/2008 at 07:06 pm
“It’s a difficult one, however it isn’t necessarily the right choice to use the largest Business Transfer Agent in the country.”
I totally agree with this statement, especially if your business has a selling price of less than about £250 000.
The higher the price, the higher the commission for the agent and company. Your business might end up being a very low priority.
Statistics show that around about 90% of businesses sold, are sold to buyers from the sellers immediate or nearby surrounding areas. So my advice is keep it local and, if you can, try to avoid being tied up in a sole mandate by a single broker and see if you can get your business to a few brokers.
There are quite a few “No Sale, No fee” brokers out there and they are the ones most likely to push for the sale of your business.
Alternatively you can have a go at trying to find a buyer without a transfer agent through dedicated website like http://www.business4sale.co.uk. Although you will need to use the services of a solicitor and accountant and you may ens up doing a bit more work to ensure a successful sale.
Hope that helps