Finding The Right Kind Of UK Business Broker To Sell Your Business

By Robert John Kemp

At the end of last year I met with the owner of an e-mail marketing bureau contemplating a retirement sale of his company. We were the fifth broker he had met and it is fair to say he was confused about the different approaches and fee structures he had been offered. It was not the first time we had faced this situation, and I offered him my own much practiced verbal overview of the types of broker operating in the UK market. In summary this is what I told him.

At one end of the scale are the advertising based agencies. You can recognise them by their websites holding long lists of businesses for sale. This type of agency is best for local market retail outlets and any business with less than �250k turnover. A business of this size will typically be bought by an owner manager looking to make a full time living. Advertising is the only practical way to reach this type of buyer. Upfront fees will typically be less than �2000 but the commission on eventual sale might be as high as 8%. The downside of the advertising based agency is that there will be limited or no support through the sale process. If you cannot handle the sale process yourself you might need to involve your accountant or legal advisor at a further cost.

For mid-range private companies with turnover up to �10 million a full service broker is a better choice. This type of broker will put considerable effort into preparing detailed sales particulars and financial forecasts for your company. They will research the most likely buyers and approach them directly to create a market for the company. Upfront fees will be in the range of �5000 and expect to pay a commission on eventual sale of 5%. A good broker will provide assistance and support at every stage of the sale process.

Companies above �10m turnover will typically employ the corporate finance team of a large chartered accountancy practice or a "boutique" corporate finance agency. The approach will be much the same as the full service broker but the advisors should have more experience of the expectations of large corporate buyers. Upfront fees for this type of advisor will typically be �10-15000 usually paid as a monthly retainer. Expect a commission on sale of 2% to 5% depending on the size of your business.

Robert John Kemp is Managing Director of UK Business Broker Select Business Sales. Select specialise in retirement sales of private companies.

Visit our website to find out more: http://www.sellingprivatecompanies.co.uk