Tom Bodkin.
Published in association with
IF YOU are looking to sell your business, then finding and selecting a suitable buyer will be your primary concern. If you do not already have a buyer lined up and need to go to market, appointing a business sales broker may be a necessary step forward.
“Not all deals will need to involve a business sales broker but if you wish to appoint one then you need to choose carefully and ensure that you are comfortable with the commercial arrangements with the broker or consultant,” said Tom Bodkin, a partner with Borneo Martell Turner Coulston.
“You will be placing the destiny of your most valuable asset in their hands, and there are important aspects that you will need to consider as part of the appointment which we can guide you through.”
Tom discusses the role that brokers can play in your business sale, what to look out for, and some of the pros and cons involved.
Before instructing a business broker or agent, you should meet with your lawyer to discuss your overall objectives and whether any legal issues need to be addressed before putting your business on the market.
There may be many benefits in appointing a sales broker, including:
- Industry knowledge. This can be particularly important in certain industries, especially those that are very technical or highly regulated, or where there may be other barriers to entry, meaning that the pool of potential buyers is reduced, and the nature of any incoming queries may be complex.
- Industry contacts. Linked to industry knowledge is the value and relevance of the broker’s contacts, as many external buyers choose an acquisition target business from within an industry in which they are already familiar.
- Sales progression. In much the same way as an estate agent, a broker can be an important link in the chain from the sales progression point of view. They can contact all the key figures in the process without regulatory constraints, including the buyer, the seller and both sets of solicitors, to help drive the sale forward.
The downsides to consider and address include:
- Confidentiality and trust concerns. Brokers may not have the same strict confidentiality obligations as your solicitor, and this can be a cause of concern, particularly if your business trades in a small or niche industry where everyone knows one another.
- One step removed from buyer. You will be one step removed from the sales process, which can lead to miscommunication at times.
- Lack of in-depth knowledge of your business. Unlike your lawyer, your broker is unlikely to be very au fait with your business and the legal documentation that is integral to it.
No matter how far off you think a potential sale might be, for an informal conversation, contact Tom Bodkin in the corporate and commercial team at Borneo Martell Turner Coulston Solicitors on 01604 622101 or email .
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
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