Which business broker to sell automotive business?

[Skyway]

Looking for recommendations for a business broker to sell my company. Garage/mail order car tuning company with turnover well over £1m.

Tried twice before many years ago and received appalling service, just had a meeting with a guy from another broker, pitched very well, has done his research but £5K+vat up front and looking at the company reviews have put me off.

Any recommendations welcome.

[jamoor]

Upfront fees would make me run a mile

[DSLiverpool]

Ask your accountant they might have a potential investor / buyer in mind.

[J012E]

I know of a good broker, unsure if he charges up front but happy to put you in touch.

He's based around the London area, where about's are you?

[singlecoil]

Anybody who is looking to buy a business is going to be checking this website

https://uk.businessesforsale.com/

Nothing to stop you listing your business here yourself (fees are something like £400 for 6 months) and getting a commercial solicitor to handle the legalities when you've got a buyer.

[Mr Overheads]

Corporate Finance departments of mid-tier Accountancy firms (i.e. £1m turnover don't bother with the Big 4 firms)

[sideways sid]

I would caution against signing up with a business broker until you have explored other options, as the agreement is invariably written in the broker's favour such that any sale of any kind will earn them a fee whether they have been involved or not.

Presumably you have approached suppliers, customers (if B2B, not retail) and competitors.

The obvious question that you need answering is where does the company or investor who is looking to buy a business like yours go to find it. A single specific broker may not be the right route.

[Frimley111R]

jamoor said:

Upfront fees would make me run a mile

But you'd expect a specialist to commit to a lot of work to locate a buyer(s) and negotiate etc for you in the hope that you do decide to sell in the end? If a business turns over £1m+ going the budget route makes non sense at all. You get what you pay for. Specialists who are good at what they do don't do 'free'.

Edited by Frimley111R on Wednesday 13th February 16:29

[Frimley111R]

singlecoil said:

Anybody who is looking to buy a business is going to be checking this website

https://uk.businessesforsale.com/

Nothing to stop you listing your business here yourself (fees are something like £400 for 6 months) and getting a commercial solicitor to handle the legalities when you've got a buyer.

That site mostly is for smaller businesses, it's like the Autotrader of business listings. It's not how larger businesses are bought/sold.

Edited by Frimley111R on Wednesday 13th February 16:30

[Frimley111R]

sideways sid said:

I would caution against signing up with a business broker until you have explored other options, as the agreement is invariably written in the broker's favour such that any sale of any kind will earn them a fee whether they have been involved or not.

Presumably you have approached suppliers, customers (if B2B, not retail) and competitors.

The obvious question that you need answering is where does the company or investor who is looking to buy a business like yours go to find it. A single specific broker may not be the right route.

I can assure you that they are not. You may find one or two who will ask for a fee dependent on finding a buyer/achieving a specific offer amount but so they should. The have no control over a sale in terms of accepting the offer and business owners can and do sometimes just change their minds.

Competitors may be suitable buyers but there are many others. How do you contact them? what do you tell them? How good are you at negotiating? How good are you at finding suitable legal/financial experts to help you? How much do you know about the sale process? It's far from easy and it's most people's biggest sale ever...

Good 'Brokers' find the right buyers, not the other way around (although nothing wrong with a bit of advertising).

[jamoor]

Frimley111R said:

But you'd expect a specialist to commit to a lot of work to locate a buyer(s) and negotiate etc for you in the hope that you do decide to sell in the end? If a business turns over £1m+ going the budget route makes non sense at all. You get what you pay for. Specialists who are good at what they do don't do 'free'.

Edited by Frimley111R on Wednesday 13th February 16:29

Also means they have been paid a good amount of money and don't need to "work for their money"

They could just take the money and say "no buyer found"

[Frimley111R]

jamoor said:

Also means they have been paid a good amount of money and don't need to "work for their money"

They could just take the money and say "no buyer found"

Indeed but I have not come across any that charge this way. The only ones which may do would be business transfer agents who essentially advertise your business and email their database. I don't have a lot of experience of the smaller end of the market tbh.

Upfront fees are designed to cover the adviser's costs of taking the business to market and getting it to the point of sale. On top of this there is a small percentage of the sale price that is their commission. It is this which is the incentive to ensure that the business sells. Bear in mind though that ultimately it is down the business owner to agree the sale and they are perfectly within their rights to change their mind and not sell after the advisor has put in a lot of work.

Selling a business is far from easy...

[Cheib]

Skyway said:

Looking for recommendations for a business broker to sell my company. Garage/mail order car tuning company with turnover well over £1m.

Tried twice before many years ago and received appalling service, just had a meeting with a guy from another broker, pitched very well, has done his research but £5K+vat up front and looking at the company reviews have put me off.

Any recommendations welcome.

Out of interst how profitable is the business/what’s it’s net profit margin ?