Selling a business is often one of the most significant decisions you could ever make as an owner. The business market in the UK is currently filled with dozens of intermediaries, from "online-only" listing sites to high-end corporate finance firms—none of which you can be truly sure will treat your business with the care it deserves.
At Turner Butler, we recognise your need for hiring a broker who understands the nuances of the British market, backed by a proven track record of delivering results not just for the clients who have sold their businesses.
Here's everything you need to know about brokers and what you should ask before hiring one.
What Is a Business Broker
Business brokers facilitate the sale of a business. To paint a better picture, you can think of them as real estate agents who sell businesses with all the financial and legal technicalities involved rather than just a house.
Role of a Business Broker
Hiring a broker means getting someone who acts as a bridge between your aspirations as a seller and the buyer’s requirements.
The key aspects of their roles are as follows:
- Keeping the relationship between the seller and the buyer professional by facilitating the awkward conversations regarding prices and terms
- Keeping the deal on track and ensuring that it moves forward through the many complex stages of due diligence and other legal hurdles
- Providing a realistic, impartial perspective on what buyers in the UK business market are looking for
Responsibilities of a Broker
Hiring a broker is more than getting a person who "lists" your business for sale.
To set your expectations, their work includes:
- Conducting a thorough analysis of your financial accounts and both your tangible and intangible assets to provide a realistic market price for your business
- Crafting a transparent sales memorandum and proactively searching for qualified buyers through an established network
- Ensuring all potential buyers sign a Non-Disclosure Agreement before any of your sensitive data is shared
- Filtering out tyre-kickers to make sure that only those with the capacity and genuine interest are introduced to you
- Assisting in the negotiations regarding payment terms, hand-over periods, and other legal requirements
Pros and Cons of Hiring a Broker
Hiring a broker gives you the following advantages:
- Having an expert do the valuation for your business often leads to a higher sale price compared to a DIY sale
- Hiring a broker means you can market your business with full confidentiality, meaning your identity is protected from both your staff and competitors
- Brokers typically handle the enquiries and all the other paperwork, allowing you to run your company while it is being marketed
Naturally, hiring a broker gives you the following disadvantages:
- Brokers typically work on commission, which affects the final sale price
- You are engaging a third party to serve as the face of your business; this makes hiring a broker as important as the sale itself, if not more so
- Following the second point, not all brokers have the same experience, especially within your specific business sector
5 Questions Every UK Business Owner Should Ask Before Hiring a Broker
To ensure that you're hiring a broker who is perfect for you or partnering with the right firm, you can use these five critical questions during your initial meetings:
1. How exactly do you assess the value of my business within my sector?
You need to understand if they have a detailed, in-depth knowledge for assessing the value of your business or if they’re just telling you a number in order to get you to list your business with them. Hiring a broker who fits you best, means they’re able to explain how they balance the facts of your financial accounts with intangible assets such as goodwill, customer base, market conditions, and other relevant factors.
2. How do you vet tyre-kickers?
You need to know about their specific vetting process. Do they require proof of funds or a signed NDA from potential buyers? What else do they do? What's their plan for maintaining absolute confidentiality about your plans to sell your business? Hiring a broker who is perfect for you means both your time and trade secrets are protected until your business is sold.
3. What’s your plan for maintaining absolute confidentiality about my plans to sell my business?
It could be unsettling to both your staff and suppliers if they heard about your plans. When hiring a broker or partnering with a firm, it is best to ask what their approach is regarding public listings (if applicable) or how they handle enquiries from competitors who might just be snooping around. Hiring a broker who is perfect for you means having a partner who keeps your business protected while it is being sold, keeping things in check until you eventually complete the sale or change your mind.
4. Can you show me your recent success with businesses similar to mine?
There is a big difference between selling an IT business and selling a catering firm or a manufacturing plant. Hiring a broker who is perfect for you means being represented by a person who has sufficient sector-specific market knowledge, even more so if they have access to a number of qualified buyers looking for the type of business you are selling.
5. How do your fees work?
Some brokers ask for initial “marketing fees” or “registration fees” as part of their work. You should confirm if there are any costs if the business doesn't sell or if you change your mind and decide to withdraw. Hiring a broker who is perfect for you means choosing one who is transparent and who you can trust to work in your favour.
Why Choose Turner Butler
Putting your business up for sale is one of the most significant decisions you could make as an owner. With Turner Butler, rest assured that your business will be sold quickly, confidentially, and with the right price.
- No sale No Fee: There are no upfront fees, we only charge you a fee when your business is sold
- No Cancellation Fees: We will not charge you a fee for cancelling our agreement
- Achieving the Best Value: With nearly 40 years of experience, we have sold over a thousand businesses and are acknowledged as experts in business sales
- Maintaining Confidentiality: We ensure that your business sale is marketed confidentially
- Expertise, Professionalism, and Experience: Working with Turner Butler means gaining access to the full benefit of the professional expertise we have built over our 40 years of selling businesses
Your satisfaction is assured through your no risk, 100%, iron-clad guarantee.
Frequently Asked Questions (FAQs)
How long does it typically take to sell a business in the UK?
On average, a business sale takes about fourteen months. The time varies depending on the sector and the current market demand, among other factors. Hiring a broker who has a database of vetted buyers can potentially speed up this process.
Should I tell my employees or suppliers that I am planning on selling my business?
We generally advise against disclosing the sale too early. Hiring a broker who can “blindly” market your business through strict NDAs and other methods to maintain confidentiality is crucial.
Is a broker really necessary if I already have a potential buyer in mind?
Much of a broker’s work is done between agreement in principle and actual completion. There are a thousand reasons for deals to fall apart and around 80% of them do! Hiring a broker is essential for minimising the reasons for the deal to fall apart. A broker should also ensure that the buyers have the actual funds to complete the sale. Having a broker who can bring other interested parties to the table could either speed up the process or result in a higher final sale price.
Sell Your Business Quickly, Confidentially, and for the Right Price with Turner Butler
Selling a business is a monumental, daunting task where expertise and sector-specific market knowledge matter most. Regardless of your reason for selling, it is always important that you are able to sell quickly, confidentially, and for the right price. For this, hiring a broker can be critical. You should ensure that you partner with the right one.
Sell your business with Turner Butler. You can start by calling us for free on 0333 1234562, where you can expect a high level of professional service that is confidential, personal, and friendly. You can also request a FREE business valuation by completing the form found at this link.
For more information, you can also reach out to us via email at enquiries@turnerbutler.co.uk and if you want to research the market before you put your business up for sale, you should sign up to our free weekly newsletter, which will help you keep up to date with our new opportunities.
