We are often asked why we think we can succeed and find buyers when there is a statistic peddled about online that only 5% of SME businesses find a buyer. Just a quick look at our order book earlier today tells me this is statistic is probably made up by parties with vested interests – whether this is to sell their business brokerage consultancy services or because they want to buy businesses without paying anything. Most of the businesses listing with us get at least 5 if not 10 enquiries, with the majority of these being genuine buyers with intentions to pay to purchase (as opposed to the highly irritating tyre kickers out to fish around for business information!). Most owners who put an effort into selling will get a price for their business. Those who make no effort wil usually fail. We are here to help achieve a sale. Contact us for an informal chat. Out there in the wild west of the internet there are loads of similar ‘facts’ being peddled by all sorts of advisers. Below are a few of these myths.

Myths

Buyers pay well for a Bolt-On

Completely untrue. So many sellers think their ideal buyer is another similar practice looking for more clients quickly. Bolt-on = owner managed business which also = lots of investment needed to make it standalone. Bolt-ons lack value and get sold as such – the buyer doing the seller a favour by taking it off their hands.

Selling a Business is Easy – its all about marketing

Total nonsense. Selling a business is hard work. It takes grafting, tolerance for others, lots and lots of patience and an ability to be flexible. It is definitely not just about marketing. Getting interested buyers is the easy bit if you have the right broker. Getting those buyers to pay any attention and commit to purchasing – thats the hard bit. Its takes 10s of hours, if not 100s, to get a deal over the line.

Once you find a buyer, everything just happens

If only. This is the hardest bit. Once the buyer is on board, this is when the real work starts. Due diligence done correctly takes up huge amounts of time and costs a small fortune in adviser fees if the buyer is using solicitors. Sellers without good paperwork almost always find this next bit virtually impossible to do.

I can sell my business tomorrow if I want to

We genuinely hope you can. Our fastest sale took two weeks, our longest one is still ongoing (5 years and counting). Some businesses are very attractive to buyers for a whole host of reasons, but the vast majority get enquiries trickling in over days, over weeks, over months, sometimes over years before a business is actually sold! And even when you get to heads of terms stage and due diligence you can add in another 2,3, 4 or 5 months or more before you get to completion. Business sales take time – the parties have to be in the right place at the right time.

My broker can deal with the buyers, I just need to list with them

Your broker can only deal with the information they have, which for most sellers is not enough. Sellers/vendors rarely appreciate just how much time and effort goes into the legal and accounting due diligence. One buyer can ask enough questions to fill up your day. Be prepared for a lot of hard work answering silly questions.

Solicitors cost very little for M&A because its so easy

And the same for accountants. Solicitors cost a fortune for M&A. Most of the specialists are used to large scale acquisitions, not SME, and they charge around £400 per hour. The cheapest price we have seen is £500 (for our own solution – via the Interim Lawyers platform for a review only of heads of terms) through to £25,000 for a city of London law firm to do the full transaction. We can give you lots of options, but its never cheap.

I just need to get a valuation and then buyers will use that to make me an offer

Buyers are not interested in your valuation. They will always get their own, or at least pretend to! Most buyers don’t really care what your business is worth, but more interested in what they can get away with paying for it. They are looking for weaknesses.

Brokers just rip you off – you might as well put an ad on Businesses4Sale.com

Yes – very true that there are loads of business brokers out there interested in taking your money up front and then not actually selling your business for you. In this case you may as well put your business on Daltons or Businesses4Sale.com and see what happens. However, you could also consider using a broker that only gets paid if a deal occurs, does not charge up front fees, and provides honest and impartial advice to all parties at all times. Sell your recruitment agency with RAS Recruitment Agency Sales.