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How to Choose The Right Business Broker To Sell Your Company

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Picking the right broker is essential if you are to get the best price for your company – but sellers find it difficult to get objective information about a broker, their track record, and the value they have put on a business. This post takes you through some of the questions you will need to ask to assess a broker and their service.

So you have made made the decision to sell, now comes the difficult decision about which (if any) advisor or broker to use to handle the sale. This post guides you through the decision making process and provides links to other articles with relevant information.
Do I need a broker or advisor to help me with the sale process at all?
Unless you have previously bought or sold several private companies the answer is almost certainly yes. The process of selling a company is complex, time-consuming and stressful. It is not something to learn on the hoof, with part-time support from your accountant, as you continue to run your business. Poor decisions can cost you tens maybe even hundreds of thousands of pounds. They may even lose you the chance to sell your company altogether.

If you have an existing offer on the table there is an understandable motivation to handle things yourself and save a broker fee. Unsolicited offers are a minefield for the inexperienced seller. It is important to bear in mind that a prime motive for a buyer in making an unsolicited approach is to avoid a competitive situation that forces a full selling price. This article will help you think through the issues surrounding an unsolicited offer – Dealing With An Unsolicited Offer For Your Company.
How do I choose between one broker or advisor and another?
There are different types of broker in the market offering services tailored to companies according to their size and sometimes to their sector. We offer some insight into the different types of brokers and advisors, and the level of fees you should expect to pay, in another post – The Different Types of Broker.

That said there are still a some basic issues you should consider:

Does the broker or agent have a strong track record of selling companies?
Check the brokers website for testimonials to past successful sales. If the testimonials are vague, and don’t include the seller’s name, you are entitled to be suspicious. Don’t hesitate to ask for references from past clients. Not “To whom it may concern” letters, but the phone numbers of real people you can talk to. Don’t be fobbed off with weak excuses.

Has the broker provided a realistic valuation of my company?
If the valuation is a lot higher than the levels proposed in one of our other posts – Realistic Valuations of Private Companies – you need to be suspicious.

Does the broker have a credible plan for getting your business in front of the likely buyers?
Be wary of brokers that rely solely on advertising to find a buyer. Fewer than one in ten companies are sold through advertising. Make sure you pick a broker that researches the most likely buyers for your company and approaches them directly under protection of a confidentiality agreement. Most sales come from this route.
Is it best to use a broker with sector experience?
There are some brokers that specialise exclusively in a sector and have built up deep expertise. They work in sectors with hundreds of companies offering similar services. We are aware of brokers that specialise in – hotels and restaurants, licensed premises, recruitment companies, accountancy practices, legal practices and small retailers. If your business is in one of these sectors the specialist broker is the best choice.

For most manufacturing, distribution and service companies there will not be a broker focusing exclusively on your sector. You may find a broker who has previously sold one or more companies in your industry, and all things being equal they should get your strong consideration. That said unless the industry experienced broker meets the other tests in the section above they will not be the best choice. Would you rather have a broker who has sold tens of businesses, or one that happens to have completed a couple of sales in your industry?


If you are interested in finding out more about these and other issues relating to the sale of a private company one of our business sale experts would be delighted to talk to you in complete confidentiality. Click CONTACT ME to book an initial phone conversation or call us on 01604 432964.

We welcome comments on posts, and questions from our readers. Use the “Leave a Reply” box below. We answer all reader questions within 24hrs. If you would like to be informed about new posts on the theme of selling a private company click the “Subscribe” button at the right hand side of this page.

One comment on “How to Choose The Right Business Broker To Sell Your Company

  1. Pingback: The Main Steps in Selling a Business | Select Business Sales

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