Business Brokers and selling a business

One of the key features of running your own business is that, if you are successful, one day you may end up selling it. You may well have to go through a Business Brokers when selling your business. And in many cases your business sale will be the one and only time that you sell a business. And if you have been successful, this will be the most valuable item you ever sell in your whole life !

I’ve been there, and done that, selling my business in 2018, in a multi-million pound deal to a PLC (see image below). With that experience behind me, I can tell you, the more advice that you get, and the earlier you get it, the better.

With the above in mind, I was enthralled by a post on LinkedIn, by John Knight, Managing Director at Strategic Business Exits, summarising his learnings from working in the business broker market. Or as he termed it ‘swimming with the sharks’!

Here are his 10 ‘Confessions of a Business Broker’;

1. Many business brokers use dubious methods, such as over-valuation and stitched-up contracts.
2. It takes as long (if not longer) to sell a £500k business as it does to sell a £5m business and a similar amount of effort is required.
3. Businesses are rarely, if ever, prepared for sale and in the worst cases, deals can fall over at due diligence.
4. If your accountant knows you are planning to sell, they should stop trying to save Corporation Tax. Every pound of retained profit could be worth x5 at sale completion and currently may only be taxed at 10%
5. Business owners should make themselves redundant. Buyers generally prefer to have secondary management in place.
6. Business owners owe it to themselves, their family and staff to do their research before signing up with a broker. Google the broker’s name with the words ‘review’, or ‘problems’.
7. The advice Business Owners get regarding selling a business can often be lamentable. A business is usually the owner’s life’s work and as such is at least as important as their pension fund. Start planning early.
8. Producing a valuation is not an exact science and a business can be worth far more to one party than another. Do not publish a price.
9. There are professional and credible buyers, but there are buyers who are as bad as any bad broker.
10. Why leave it until you’re 75?! Even if you go to market today, it could take a year to sell and you’ll probably have a 3-year earn-out to contend with.

John spent 40 years in business prior to becoming an M&A advisor just over five years ago. Previous to that he had sold four of his own businesses and been through four acquisitions, so he is probably better qualified than most to advise other business owners on their exit.

If you want to contact John, you can do here.

In addition, please take a look at these three interviews that I was on recently that all discussed my business sale – you’ll find them of use and of interest if you are a Business Owner and feel that someday you will be selling your business;

In addition, if you are looking to sell your business, or are just looking for advice, I would recommend that you speak to John Crayford at Intelligent Business Partners, Caroline Broad at Clarion Solicitors or John Sykes at Skye Corporate Finance. Each of them will be happy to give you advice.

And of course, I would be happy to chat with you on my experiences selling my business. get in touch below.

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If you’d like to discuss how I could help you, whether in preparation for a business sale or you feel you need a Business Sounding Board by your side, then please give me a call, drop me an email or connect with me on LinkedIn. Details below.

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