How Can A Seller Best Sell His Business?

16/09/2009 by info.

I was speaking to a client yesterday, he told me that we have not been marketing his business properly as he has been advertising his business and has had 4 people respond, although apparently none of these people were interested in buying his business.

Now private sellers will always get a higher response than an agent, why? Because buyers will want to establish whether the seller has made an error in underestimating the value of his business. They will know that an agent will know the value of the business.

Another reason why private sellers get a higher response rate, is simple. When they advertise their business they reduce the price by the agents commission so a £29,000 business is advertised for £25,000 This actually undermines the agents efforts as who is the buyer likely to contact? The private seller offering a cheaper alternative.

The benefit of using an agent is that when an introduction is made to the client the seller knows that this buyer has gone though a vetting procedure. Questions have been asked about how they will finance the purchase. A private seller will have to go through that process themselves, and they will find that they are wasting their time talking to dreamers and timewasters, people without any money at all.

So what actually happened was the client spent money advertising his business and then spent hours talking to people who were never going to buy his business. So how can a seller best sell his business? The best way would be for him to invest and work in improving his business rather than spend money trying to find a buyer, because the better the business the greater the change they have of selling.

The seller also does not include in his calculations the cost of his time, advertising and increased solcitors fees. Yes your solciitors bill will be higher as they will be performing some of the tasks an agent would carry out for you.

So perhaps a private seller is not actually saving any money, and instead of trying to compete against your agent a seller should instead be working with him on a much closer basis.

.

Posted in Selling Your Business | No Comments »