Choosing a business brokerage firm to work with can be confusing for business owners. Often you will only sell one business in your lifetime. You have a very significant asset and you need to put your faith in the right people to do the job right the first time.
Our principal Directors, Michael Thompson and Ian Aldridge, believe that selling your business requires us to work closely with you in a collaborative way to get the job done. We enjoy working with clients who put their faith in us because there is a match in expectations and because we are bringing the right expertise to bear for you.
WHAT QUESTIONS SHOULD I ASK A BROKER BEFORE CHOOSING TO ENGAGE THEM TO SELL MY BUSINESS?
We strongly recommend that you ask any business broker:
How many years of experience do you (personally) have selling businesses?
Often, business brokerage firms contract or employ brokers who have almost no experience in selling businesses. This means they are training by selling your business. Ask how many years they have been selling businesses. If it is less than 2 years, they are inexperienced. Many business brokers last less than 12-18 months in this industry because they lack the skills and experience to successfully execute transactions for their clients. Don’t entrust the sale of your major asset to a junior salesperson!
It is often said that it takes 10,000 working hours of experience for any person to master a particular skill or profession. That equates to 5 years of work.
Each of our principal Directors at Bespoke Business Brokers has been selling businesses successfully for clients for over 5 years. Examples of industries that Michael and Ian have dealt with include:
- Freight & Transport
- Freight Forwarding
- Customs Broking
- Road Freight
- Warehousing & Storage
- Cold storage
- Building & Construction
- Services & Trades
- Commercial landscaping
- Import / Export
- Allied Health Services
Have you owned and operated your own businesses before?
If your business broker has not run their own business before (and business brokerage should not count with this question), then consider their commercial experience carefully. Business brokers who have run their own businesses immediately have a better understanding of your business operations, and how to interact with potential buyers of your business.
Each of our principal Directors at Bespoke Business Brokers has run their own successful businesses, prior to becoming business brokers. Our principal Directors also have extensive commercial backgrounds in the commercial sector. Learn more [link to Our People page] about Ian Aldridge and Michael Thompson.
Have you dealt with a business similar to mine before?
By this, we do not mean that your business broker needs to have sold a business exactly like yours. But they should have had exposure to your wider industry. If you are a manufacturing business, have they sold manufacturing businesses? If you are a services or trade-related business, have they sold a similar business previously? If you are a freight and transport business, have they sold transport or freight-related businesses? Their experience may also come from having owned and operated a business in your wider industry.
How long will it take to sell my business?
It is not like selling property (even commercial property). If your business broker advises you they can sell your business within 8 weeks, they are either not being direct with you or they are very inexperienced. You will simply become frustrated when this does not happen, and lose faith in that broker. More than likely, you may need to start the process all over again when you realise you have chosen the wrong broker to guide you through.
Business sale transactions take time, and by allowing the process to unfold carefully we can seek the highest possible price on the best possible terms for the sale of your business.
We typically see an average of 6 months from the time you first make contact with us to the time of sale. Sometimes it can be 3 months, and sometimes 12 months. There are many factors that dictate this, such as the state of the market, the number of buyers searching for a business similar to yours, the recent performance of the business, and more. For example, freight forwarding businesses tend to sell in 4 to 6 months. Retail-related businesses take longer in the current environment.
The guarantee you have from Bespoke Business Brokers is that we will work with you for as long as it takes to get the job done. We work to get your business sold as quickly as possible, but we don’t rush the process.
Do you have testimonials?
Does your broker have testimonials from past clients? Whilst it is difficult to be able to talk to past clients due to sensitivity over confidentiality, your broker if they are well organised should have testimonials they can provide, to reassure you that past clients have been satisfied with their work.
See our clients talk about Michael and Ian, our principal Directors.
Does every business sell?
If your broker says ‘yes’, they are not telling you the truth. Not every business sells, despite the right process and all best efforts. Sometimes they are factors that prevent a business from selling. It may be that it is in a terminal downward trajectory and this is clear to potential buyers. The industry the business is in may have very few buyers. There can be many different reasons.
Most businesses will sell, if priced correctly and if sufficient time is allowed for the sale process to be conducted.
Will I tell you what price I want for my business and then you list it at that price?
If your broker says ‘yes’, please be aware that this is an entirely backwards notion. It would also tend to suggest that the broker is happy to throw your business on the market and ‘see what happens’. As you can imagine, you are unlikely to receive very good service from such a broker, and it is quite likely your business will still be on the market a year later, with very little interest. Why? Because it is not priced correctly.
Your broker should be appraising your business, based on a careful evaluation of your financials, performance, the industry and the potential depth of buyers in the market for your business. They should then be providing you with a market value estimate in a range from low to high that you should expect from a sale process.
At Bespoke Business Brokers, we would usually prefer not to know what you think your business might be worth. We would like to appraise your business and provide our recommendations without being influenced by this, so that you can be assured we are providing you with an honest opinion, based on our expertise.
Telling your broker what to sell your business for, is a little bit like going to a lawyer and telling them what legal advice they should provide you with. That seems silly, doesn’t it!
You are probably fantastic at running your own business, and a very good negotiator within the context of the services or products that you provide. We can assure you, however, that you are the worst possible person to either price your business or to sell it. You are, like it or not, emotionally involved. We take the emotion out of it, provide you with honest opinions, and deliver you a sale process based on experience and expertise.
If you are not happy with the market appraised price that is put on your business, you can then make logical decisions. It may be that your expectations need to adjust to the level of the market, or you may decide to continue running the business for a bit longer and improve its financial position.
Alternatively you may find the market appraised price is higher than you expected, and this does also happen.
Whichever the case, at Bespoke Business Brokers we will give you an honest answer.