Selling a business - who to talk to?

[Dave2P]

JackSTC said:

Er, I'd love to help, but I haven't read most of them.

No worries, I found some interesting stuff on Diomo and Reddit anyway so thanks for those pointers.

singlecoil said:

Why would they give away the information they are selling at a much higher cost on a one to one basis?

Same basis that underlies the whole "Freemium" model; if the free stuff is useful then your customer's half way to buying the paid stuff (and even if they don't, they may recommend your free stuff to someone else who will buy in).

Anyway, apologies for the thread diversion; I suspect it's a relevant question for many of us and the replies are useful input. Cheers!

[PugwasHDJ80]

JPJPJP said:

Why would selling a business be any easier (or any harder) than selling any other similar value asset?

This is an incisive question that would benefit more shareholders from giving serious consideration. They then might have a better appreciation of the advice they need and whether that advice will deliver value. Choosing an advisor, or even whether to use one, is really hard because it's somwthing most people only do once, they therefore don't know which questions to ask or how to assess the answers. I spend most of my life nowadays trying to educate shareholders so they can answer these questions themselves. This is an industry unfortunately full of bullst, and people trying to sell bullst.

To answer your question directly, and from an SME and mid market perspective, the main differences are:

1. Risk transfer, there are very very few assets where the actions, or inactions, of the previous owner can destroy the new owner
2. Unknowable risks: even with the very best DD no buyer can fully be aware of what they are buying. As an example the vagaries of things like culture and ethos are incredibly hard to ascertain and understand from a third party position.
3. Asset pricing. Very few asset classes are filled with genuinely unique assets, well M&A is. Since I sold my businesses I've advised close to 100 business owners and looked at hundreds more. Even within tightly regulated industries the variances are startling. This means there is no true comparison. There is of course price beading within an industry, upper and lower limits, but even here businesses will fall out of the banding significantly (both at the top and bottom....)
4. Regulation: 90% of the time acquirers don't understand the regulatory environment of target (all too Often neither do the.l advisors but that's a different topic....)
5. Legal process, the complexities above drive Complex legal dpcimentation, which few layman will ever truly understand. However you need relevant lawyers who can take a pragmatic apprpachtl to a transaction to have any hope of the legals fulfilling their purpose.

Undoubtedly you'll other asset classes with similar nuances, bit I can't think of any with the same issies

JPJPJP said:

I look, for instance, at some companies that have raised wodges of cash from investors and - to all intents and purposes - spaffed it (if you want a couple of examples, message me as I have loads!) and it makes me mildly curious about the "sale" process involved in reaching that stage.

At that stage in the business life cycle it's roulette money but with a massive tax advantage le!