Questions about selling a business
Q. Why use a broker to sell my business?
A. Using a professional broker can facilitate and speed a satisfactory sale transaction. A broker will provide an expert, realistic valuation, market your business consistently and for an extended time if required, and also work to maximise the number of potential buyers and increase competition. A broker will also pre-qualify potential bidders before disclosing sensitive information to ensure confidentiality and help avoid any timewasting.
Q. Why choose Businesslink Brokers?
A. The process of selling a business is strewn with pitfalls. At Businesslink, we have an enviable track record in helping clients overcome these hurdles to optimise the chances of a successful deal. We also pride ourselves on excellent personal service, providing you with unlimited pre-appointment advice to help you consider your options and make the best decision for you. We also offer clients access to professional, legal and financial resources, which might not otherwise be available. We firmly believe that these attributes, combined with our professionalism, transparent business terms and commitment to confidentiality, make us the brokers of choice for any business owner contemplating selling.
Q. How do you value my business for sale?
A. A business is only worth what someone will pay for it. A broker with experience of the appropriate marketplace is best qualified to estimate a fair and realistic value and will use a number of gauges to calculate an asking price. We will arrive at a figure by weighing up factors such as the type and scale of your business, its annual turnover, gross and net profit, the quality of your client base and management, and additional measures such as location. Goodwill will also play a role, particularly if you own a smaller support service business. We usually value goodwill as a multiple of annual turnover, gross and net profit or a combination of all three.
Q. How can I be sure that you will maintain confidentiality?
A. We understand that anonymity is critical to many sellers to prevent customers, staff, competitors and suppliers becoming aware of any potential changes or disruption. As a result, we make the marketing of your business a highly confidential process, agreeing your required, precise level of confidentiality with you at an early stage. We also maintain full discretion when speaking to any contacts and insist that any prospective buyers sign a binding non-disclosure agreement (NDA) before disclosing any sensitive information to them. Our long experience also means that we attach great weight to establishing the capacity and credentials of potential buyers.
Q. What are ‘Heads of Agreement’?
A. ‘Heads of Agreement’ is a summary of the principal commercial terms agreed between a buyer and seller. Although non-binding, it is an important step and requires careful wording not just because the terms can be difficult to renegotiate later but also to help minimise the future legal costs involved in any sale.
Q. How long does it take to sell a business?
A. Timeframes depend on market conditions and several other factors, such as the popularity of the type of business in question. The quickest sales can happen in a few weeks, while others can take years. However, as an average guide, you should think in terms of six to 12 months from appointing us as brokers to the completion of a sale, and of meeting your first potential buyer within a month or so of your business going to market. Using an experienced broker like us delivers the best prospect of expediting a sale as we will quickly implement a well-defined marketing strategy designed to gain you maximum exposure and interest from high quality buyers.
Q. What information will potential buyers need to see?
A. It’s sensible to prepare some essential documents for potential buyers to view. These should include official annual accounts for at least three years prior to an intended sale, details of current turnover, gross and net profit, as well as important contracts, leases and deeds, and information on physical assets and any outstanding finance.
Q. Is there a way to enhance the value or marketability of my business?
A. Yes, almost invariably. Optimising the quality and detail of the information you supply to prospective buyers may be time-consuming, but in our experience, is usually more than repaid. We also strongly recommend talking to us several months or even several years before any intended sale. This gives us time to review your business performance and advise on how you can develop and grow it to maximise value and saleability when you do come to sell.
Q. Do I need a solicitor and how do I choose one?
A. We strongly recommend that you use a solicitor. However, it’s important that the firm used specialises in corporate activity and can offer a fee arrangement that protects your interests. We can provide guidance on negotiating arrangements to safeguard you against high and unpredictable legal fees. If you wish, we can also provide you with introductions to suitable firms.
Q. How much do you charge for your selling services?
A. We charge a commission on each sale based on a competitive percentage figure and a fixed standard fee for our marketing and sale services, both of which we will confirm with you at an initial, no-obligation consultation. It’s all part of our ethos of treating clients with the utmost integrity and ensures you will never be faced with any nasty surprises or hidden extras.
Questions about Buying a Business
Q. Why should I buy an existing business?
A. Buying an established business has several advantages over starting one up. An existing business will have key systems already in place and usually an existing customer base, which will enable trading from day one. Most importantly, the fact that the business is or has been operating will evidence a demand for the products and services it offers. Any staff will also provide a valuable knowledge base and often, the business will come with a network of useful contacts and suppliers.
Q. Are your services free to buyers?
A. Yes. We are here to help and provide you with professional advice from the start and facilitate the acquisition of any business you are seriously intent on purchasing. Our services include free, 24/7 hour access to the business listings on our website, free e-updates notifying you of new businesses as they come on sale, and, if required, assistance in identifying any suitable sources of finance. We also offer a targeted search service for a competitive fee. This involves focusing our expertise and network of contacts into researching, seeking out, identifying and qualifying businesses that fit your acquisition criteria.
Q. Can you help with raising finance?
A. Yes. We can assist you in finding reliable and competitive sources of finance or funding if needed.
Q. What happens when I find a business of interest?
A. Once you have identified a business opportunity that matches your experience and goals, and signed the appropriate non-disclosure agreement (NDA), we will supply you with more details in the form of an information pack or sales memorandum. We will then provide additional information such as statutory and management accounts at a later date should you wish to take matters further.
Q. How long does it take to buy a business?
A. Once an offer has been accepted, you should allow 6 to 8 weeks for both parties’ solicitors to agree the draft sale and purchase contract and achieve completion.