Selling a business and choosing an agent
Discussion
I've run a growing business for 6 years that I've had valued by accountants reliably at circa £1.4-1.6m. I'm looking for an exit but having a nightmare choosing a sales agent. As its such an unregulated industry and everyone charges a fee upfront its been a case of eliminating the rouge ones and trying to find one that will follow through. This value puts us on the cusp of the "corporate" agents who work databases of clients etc rather than the smaller "advertisers" who simply advertise and see what interest they get. I've whittled it down to:
BCMS
Benchmark
KBS Corporate
Does anyone have any experience using these companies or has good personal experience with another you can recommend?
BCMS
Benchmark
KBS Corporate
Does anyone have any experience using these companies or has good personal experience with another you can recommend?
Edited by rgp77 on Wednesday 19th April 21:52
what type of business is it?
Will be in similar shoes in a few years ( although not quite that high a figure !! )in a particular market and hence there are only a few specialist business sales agents I would go with who specialise is our area. I would not use a general sales agent.
Will be in similar shoes in a few years ( although not quite that high a figure !! )in a particular market and hence there are only a few specialist business sales agents I would go with who specialise is our area. I would not use a general sales agent.
Edited by superlightr on Thursday 20th April 09:33
Edited by superlightr on Thursday 20th April 09:39
I spoke with these people and got their free valuation:-
https://www.turnerbutler.co.uk/sellingbusiness.htm...
Luckily I then managed to sell without instructing them thus avoiding any fees. The valuation was a good selling tool tho and more objective than your accountants version which may be over optimistic.
https://www.turnerbutler.co.uk/sellingbusiness.htm...
Luckily I then managed to sell without instructing them thus avoiding any fees. The valuation was a good selling tool tho and more objective than your accountants version which may be over optimistic.
I used KBS, I wish I had used someone else.
With hindsight my accountant would have been a good place to start so talk to yours.
Remember the legal fees will make your eyes water.
For that valuation I assume your netting £4/500k p/a ? or your in a highly specialised field with cast iron contracts. If this is so I would pay a manager to run it for you and go and sit on a beach.
Ask yourself if you set up in competition to yourself without YOU in the company would it cost £1.5m to succeed? if you answer no then question the valuation (unless you expect to be employed by the buyer after sale which would be odd)
With hindsight my accountant would have been a good place to start so talk to yours.
Remember the legal fees will make your eyes water.
For that valuation I assume your netting £4/500k p/a ? or your in a highly specialised field with cast iron contracts. If this is so I would pay a manager to run it for you and go and sit on a beach.
Ask yourself if you set up in competition to yourself without YOU in the company would it cost £1.5m to succeed? if you answer no then question the valuation (unless you expect to be employed by the buyer after sale which would be odd)
rgp77 said:
I've run a growing business for 6 years that I've had valued by accountants reliably at circa £1.4-1.6m. I'm looking for an exit but having a nightmare choosing a sales agent. As its such an unregulated industry and everyone charges a fee upfront its been a case of eliminating the rouge ones and trying to find one that will follow through. This value puts us on the cusp of the "corporate" agents who work databases of clients etc rather than the smaller "advertisers" who simply advertise and see what interest they get. I've whittled it down to:
BCMS
Benchmark
KBS Corporate
Does anyone have any experience using these companies or has good personal experience with another you can recommend?
Yes, I know all of these companies and used to work for BCMS. BCMS are good but you may find their fees a bit high, iirc its about £50k upfront. Typical success fees are around 3% for all companies.BCMS
Benchmark
KBS Corporate
Does anyone have any experience using these companies or has good personal experience with another you can recommend?
Edited by rgp77 on Wednesday 19th April 21:52
The ex owners of KBS are the current owners of Benchmark. I'd definitely avoid Benchmark, they are focused heavily on sign ups but far less so on successful sales. My knowledge of KBS is a bit out of date but they were improving from a poor start (now under new owners) but DS seems to have more experience of them.
You'll always find people moaning about M&A companies but selling is hard and requires a lot of work and often business owners scupper their own deals.
PM me if you want a couple of better options.
Edited by Frimley111R on Thursday 20th April 17:58
Frimley111R said:
Yes, I know all of these companies and used to work for BCMS. BCMS are good but you may find their fees a bit high, iirc its about £50k upfront. Typical success fees are around 3% for all companies.
The ex owners of KBS are the current owners of Benchmark. I'd definitely avoid Benchmark, they are focused heavily on sign ups but far less so on successful sales. My knowledge of KBS is a bit out of date but they were improving from a poor start (now under new owners) but DS seems to have more experience of them.
You'll always find people moaning about M&A companies but selling is hard and requires a lot of work and often business owners scupper their own deals.
PM me if you want a couple of better options.
BCMS is £20k upfront, others are circa £10k. Of course BCMS justify this based on a range of big business sales, but they all have their slick marketing. When you consider how unregulated this industry is, and fact that only "advertising agents" exist at this SME level (rather than proper M&A companies that wouldnt even consider us) whatever choice I make feels like it'll be a gamble between wasting the money (as you said they just want the sign ups for their fee - and who wouldnt like to make £10k just for half a days initial meeting) and choosing the agent who will put the work in to make the final fees (circa £50k).The ex owners of KBS are the current owners of Benchmark. I'd definitely avoid Benchmark, they are focused heavily on sign ups but far less so on successful sales. My knowledge of KBS is a bit out of date but they were improving from a poor start (now under new owners) but DS seems to have more experience of them.
You'll always find people moaning about M&A companies but selling is hard and requires a lot of work and often business owners scupper their own deals.
PM me if you want a couple of better options.
Edited by Frimley111R on Thursday 20th April 17:58
How on earth am I supposed to choose?
I've sold businesses twice - it's a pain !!!
No easy answer, I used my accountancy firm (one of the larger firms, with a corporate finance arm) to sell, but it is very expensive, and time consuming. Kept getting answers that my co. was wrong size, wrong turnover, wrong location, employees too old, not enough repeat turnover, not enough IP etc.etc. etc. Then anticipated value gets chipped away !!!
There is a statistic, that something like 90% of business sales will be to someone the company knows. Makes most sense when you think about it. Why buy something you know nothing about ?
So good starting point is to work out all companies in your industry, then you can give your selling agent the details when they get started with marketing your co.
Happy to talk through if it helps.
No easy answer, I used my accountancy firm (one of the larger firms, with a corporate finance arm) to sell, but it is very expensive, and time consuming. Kept getting answers that my co. was wrong size, wrong turnover, wrong location, employees too old, not enough repeat turnover, not enough IP etc.etc. etc. Then anticipated value gets chipped away !!!
There is a statistic, that something like 90% of business sales will be to someone the company knows. Makes most sense when you think about it. Why buy something you know nothing about ?
So good starting point is to work out all companies in your industry, then you can give your selling agent the details when they get started with marketing your co.
Happy to talk through if it helps.
If you have had the company valued, presumably the company that did the valuation have insight into the market for acquisition within your industry?
If not, how can you be sure of the valuation?
Presumably, you are aware of those who are actively acquiring in your sector so could you make an approach direct?
If not, how can you be sure of the valuation?
Presumably, you are aware of those who are actively acquiring in your sector so could you make an approach direct?
DSLiverpool said:
Ask your accountant to circulate your companies availability in as much or as little detail as your comfortable with.
^This.janesmith1950 said:
Looking at your own upward/downward supply chain is a good place to start.
^And this.Also think about your competitors or businesses with a very close similarity to you who might relish the chance to expand.
Remember, with interest rates at rock bottom, there's plenty of capital about, looking for decent ventures to gain a return from. Furthermore, some of these protagonists will have some excellent experience and skills to bring to the game too, so may see opportunities in your business that you do not.
bad company said:
DSLiverpool said:
rgp77 said:
BCMS is £20k upfront, others are circa £10k. ?
This is because BCMS probably dont think they have a cats chance in hell of getting a sale.BCMS can charge much more than £20k because they are a quantum leap ahead of any competitor in terms of resources. There are no guarantees of any sale from any business it must be said.
Frimley111R said:
That's up to you but bear in mind how much work will be done upfront to generate potential acquirers, prepare you and your business and support you through the process. If you feel your business isn't worth it then fine.
BCMS can charge much more than £20k because they are a quantum leap ahead of any competitor in terms of resources. There are no guarantees of any sale from any business it must be said.
Surely if he has an accountant in to give a valuation a lot of the work is done? BCMS can charge much more than £20k because they are a quantum leap ahead of any competitor in terms of resources. There are no guarantees of any sale from any business it must be said.
I think the OP has gone underground but I'd be relying on that and making sure those active in the marker knew I was available for a chat.
wickedtopspeed said:
I've sold businesses twice - it's a pain !!!
No easy answer, I used my accountancy firm (one of the larger firms, with a corporate finance arm) to sell, but it is very expensive, and time consuming. Kept getting answers that my co. was wrong size, wrong turnover, wrong location, employees too old, not enough repeat turnover, not enough IP etc.etc. etc. Then anticipated value gets chipped away !!!
Large accountancy firms will always charge a premium. A buyer will often try to knock your business but your deal leader should have answers to all these questions. Many owners also over value their businesses, most do tbh,No easy answer, I used my accountancy firm (one of the larger firms, with a corporate finance arm) to sell, but it is very expensive, and time consuming. Kept getting answers that my co. was wrong size, wrong turnover, wrong location, employees too old, not enough repeat turnover, not enough IP etc.etc. etc. Then anticipated value gets chipped away !!!
wickedtopspeed said:
There is a statistic, that something like 90% of business sales will be to someone the company knows. Makes most sense when you think about it. Why buy something you know nothing about ?
.
Never heard that stat and from all my experience it's the opposite. .
desolate said:
Frimley111R said:
Never heard that stat and from all my experience it's the opposite.
I suppose it depends on the trade, but wouldn't most buyers be from within the trade sector, or be a supplier/customer?edit or be an investment house active in the sector?
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