The Cost of Selling Your Business

  • 2/26/2016
  • Keiran Taylor

At Penrose business brokers we specialise in assisting our clients in planning and then executing the sale of their business. We are one of many firms in the UK offering this service and the range of services and cost can be vast, often leading to confusion about who to entrust with, what is for many, the most important single transaction of their careers.

Our clients would tell you that we start our relationships with them, by removing many of the misconceptions and mystique around the field of business broking. By explaining and guiding them through the quirks of this often misunderstood industry, they are then freed from the smoke and mirrors to make an informed choice about who they partner with to sell their business, based on what can be offered rather than cost. When selling a business it is crucial that the first approach to market is handled sensitively and professionally to ensure the best chance of success and by partnering with a broker you trust and who has the necessary expertise and experience you will stand the best chance of achieving success.

The range of services and fee structures offered by the various business brokers to SME's is vast, at one end of the spectrum are brokers who operate like a marketing outfit, their clients will pay a fixed monthly fee for the privilege of being part of their sale programme and then a percentage of the deal value once the business is sold, the risk here being if the business does not sell straight away, or ever, the client could be significantly out of pocket with no sale in sight.

At the other end of the spectrum are brokers who remove this risk by operating a "no win no fee" type of structure with no upfront costs, this can often be appealing to a business owner however the percentage of deal value being paid at the end can often be high, effectively the successful sellers will subsidise the brokers costs for the clients who were not successful. Often, due to this nature of structure, these brokers must reduce costs to a minimum as their income stream is constantly at high risk, which can manifest itself as low contact, low advice support through the sale.

From talking and listening to our clients, we believe the service most demanded is a balance between these 2 models and is based around advice and support. A fair success only fee gives our clients confidence we are acting in their best interests, but with a nominal amount up front which covers costs to ensure high quality, effective marketing and qualified advisors are on hand to guide and support our clients through this sensitive transaction.

Keiran Taylor.
Senior Lead Advisor
Penrose Business Brokers