In order to ensure that you get a satisfactory and objective valuation, together with an effective sales service, it is essential to choose your business transfer agent with care.
These are some of the key points to bear in mind:
- How long have they been established?
- Are they totally independent?
- Do they have experienced and competent personnel at all levels?
- Do they provide a national network of offices?
- Do they ask prospective buyers relevant financial questions to ensure that the funds are available to buy the business?
- Can they introduce good sources of finance?
- Have they got the expertise to value businesses and stock?
- Have they got a successful track record in selling your type of business?
- Do they advertise extensively on a national basis in the relevant trade magazines & do they have a website facility?
Chris Rowlands, Blacks Business Brokers
"You need to look at how an agent will deal with the sale of your business. Who’s going to deal with the sale?
"What experience does that person have in selling businesses? What similar businesses have they sold recently, and how did they sell them?
"What professional organisations are they associated with?
"Are they any grievance procedures if things go wrong?
"How is the business marketed? They should provide proof of where they intend to advertise your business, such as on business for sale listing websites. Also, check out each agent on the internet, checking for praise or complaints on forums and so on."
Norman Younger, Kensington Business Brokers
"There are two aspects to research. Firstly, does anyone know someone who’s used this person and can they give you testimonials?
"Phone a few up and see if you get a feeling about whether they’re people you can trust. Do they answer the answer the phone, do they return your calls?
"You can ask them how many deals they’ve done in the last 12 months, but they might not tell you. I think much of it is down to gut feeling."
Derek Burgoyne, Cornerstone Business Agents
"Try Googling their name to see if there are any complaints against them on websites.
"Speak to them on the telephone – try to speak to the person who will be handling your business. Are they full of spin or do they give you good advice on the phone?
"How much experience does that person have?
"Pick up the phone and try to speak to clients of the business, asking them what they think about the service they have received. I would always do this if I were selecting an agent.
"There is no substitute for experience, but don't be fooled by brokers who claim to have been selling businesses for 50 years. It could be that the business was founded 50 years ago, but the founders are long since departed and your sale will be handled by someone new to business sales.
"Always insist on a copy of the agency agreement they will want you to sign to be sent to you before any meeting. This will give you a chance to look over it at your leisure and be ready with questions.
"Find out what the procedure is if you want to complain about the service you receive. If brokers are not members of a professional body with disciplinary procedures, why not? Be very wary.
"Ensure the company you choose is not a call centre operation, that the person dealing with your sale is not based in an office hundreds of miles away and consequently has never even visited your business.
"Be a fox! Pick a business the agent has for sale then phone them and ask questions about it. If you get good, clear answers and think they handled your enquiry well, great.
"However, sadly in most cases you won’t get any suitable answers and will be fobbed off. Remember, this is how prospective purchasers of your business will be treated if you instruct this broker!"
Don Glossop, Andon Frères
"Many of our new clients tend to come from referrals from former clients or professional contacts such as solicitors, banks or financial advisers, so the research may have already been done.
"Where research is required, I would guess most people start with websites searches.
"Once you make contact with a broker, you've got to be content with his experience, professionalism and qualifications, and be comfortable with who you're going to work with.
"Will he provide the right level of service? What's his track record? Getting testimonials from his former clients can help."
Rupert Cattell, Amberglobe
"They should have a look on the broker's website at the type of businesses they're selling. And they should be a 'phantom buyer' to see how they are treated, which should show whether the broker is competent.
"They should also ask the broker how many businesses they sell each month and what percentage of their businesses are sold each year."
David Rhodes, Horizon Business Agents
"I'd suggest typing the name into Google and if nothing negative comes up, if no vendors have felt badly treated enough to post anything negative on a forum, then perhaps you can be confident that the agent is reasonable.
"The other thing I would say is look for recommendations."
Shaun Sweeney, Turner Butler
"See the testimonials. It’s a simple answer!"
John Anderson, Ashley Tate
"As the current owner, how committed are you to the sale – do you want to 'go on the market' or do you want your business sold?
"If you want to 'go on the market' you can do this yourself. What you can't do is accurately and professionally value your business, deal with buyers and non-buyers, establish the financial credentials of buyers and deal with the lawyers, accountants, banks and regulatory bodies involved in the sale.
"If you are serious about selling your business then talk to a serious agent, someone with experience, someone who is honest, someone who can display evidence of successful business completions of concerns such as yours.
"Seek several opinions and challenge every one:
- How has the valuation been calculated?
- Has the agent identified and dealt with all required complexities?
- Has he thoroughly examined accounts, studied the lease and/or the freehold property?
"Ask questions like:
- How long have they been valuing businesses?
- Will they be dealing with the sale or will you be handed over to a call centre?
- Can they provide at least 20 comparable completed business sales?
- Can you talk to existing clients?
"If any of the answers to any of the questions above cannot be answered because 'it's confidential' then switch to an agent who will provide straight answers.
"If they want a fee to 'go on the market' then why? Is it justifiable?
"How many businesses does this company put on the market each year and what percentage do they sell? What evidence do they have, or are they simply giving answers they want you to hear?
"Companies like Pinders and Taylors carry out thousands of business valuations each year – many of which are for loans for businesses sold by agents. Banks lend money to business buyers to enable them to buy, and will know which are the successful business transfer agents.
"Does your accountant know you are selling? If not he or she should, as there will be tax implications that need consideration. If you feel it might be productive, then get your accountant to talk to the agent.
"Most importantly: obtain a copy of the agent's terms and conditions. Study it. Question it. Understand it. Get legal advice if in any doubt.
"Use common sense. What did you pay for the business? When? Logically, what must it be worth now?
"Comparing with businesses 'on the market' is futile. 'On the market' means they haven't sold."
