Broker Matching Case Studies
Case Study 1:
A construction business with turnover of circa £5 million. The owners wanted to retire. They had spoken with a couple of brokers already— BCMS and Bluebox CFG - who presented impressive pitches. However, after some investigation, the vendors realised that these firms were not right for them. They approached us to help.
Brief: I was to put together a shortlist of the best firms in the UK specialised in selling larger businesses in the construction sector. The clients also wanted us to ensure they got value for money. They were not particularly concerned about the size of the retainer they would pay at the start - within reason - but wanted to ensure that the total they paid by the end of the sale (retainer + "success fee") was minimised.
I put together a preliminary shortlist of 30+ brokers who fit the criteria and spoke with the MDs/CEOs of every single one to take them through a questionnaire (for example, who in the company would be handling my client's account if my client signed with them). The list was fine tuned down to six brokers who passed all tests. Creating the shortlist plus getting through to and speaking with the right people at each firm took a total of over 30 hours. That's despite having a running start with our extensive broker database and knowledge base.
The clients met with all of the six brokers - they choose to meet at each broker's own premises rather than have the broker come to them - and then decided which one they preferred.
I got the winning broker to reduce their retainer by £9,000 (which in itself was several multiples of what the client paid). Further, I got the client a 1% reduction on the success fee - reduced from 3.5% to 2.5% (which equated to £75,000 on his £7.5 million asking price). Total saving for the client was in excess of £80,000 but, more importantly, the clients were satisfied that the broker they picked from the shortlist was infinitely better placed to sell the business and meet their price aspirations than any other broker they had met or could find themselves.
They were so delighted that they had this to say:
"For anyone thinking of selling their business speak to Clinton first!
After attending a free seminar organised by the "World leading" broker and their numerous follow up phone calls I finally decided to put my business up for sale early last year but not believing all the too good to be true vague successful sales examples from the seminar I turned to Google for some alternative brokers and came across Clinton and The Exit Firm.
After speaking to Clinton his free and impartial initial advice persuaded me to sign up for his broker filtering and initial negotiation service. This identified six potentially suitable brokers with full details of each brokers strengths and fee structures and even checked their letters of engagement and terms and conditions. After visiting them all it was evident that Clinton had matched five of them to my needs perfectly and I found it very difficult to choose between them. I am sure I would never have found any of them on my own.
His very modest fee is worth every penny and his initial negotiation and attentions to details saved me several thousands of pounds.
I would not hesitate to recommend Clinton's services to anyone."
Case Study 2:
The partners of a consultancy firm in the south-east had built their business to several million in turnover and had a full management team in place. On deciding to retire they did some investigation on their options and spoke with a few business brokers. They soon realised the market was, in their words, a "minefield". So they sought my assistance.
I vetted the UK's top corporate finance and M&A advisory firms who specialise in selling consultancy businesses and fine tuned that down to six of the best candidates. I provided the client with a detailed report on each of those six - why they were suited to his business, their past experience in the sector, their fees, the director-level professional who would be handling the sale etc.
The client spoke with / met with all of them and got back to tell me their preferred partners. I then negotiated the price with that corporate finance firm and saved the client over £30,000 in fees. The client has very kindly written this testimonial and would likely be willing to provide it in person if you wish to speak with them:
"When we made the decision to sell our business, the prospect of finding a third party to work with us in marketing and selling the Company was daunting. Like many people in our position, we have had no experience of buying and selling businesses in the past and therefore no personal insight into which organisations would be a good fit for us and help to maximise our return. The numerous scare stories we discovered when searching the internet didn’t help.
We engaged Clinton to help us steer through the process of finding a third party to support us. His provided us with a better understanding of the process, what to expect, and the potential pitfalls as well as identifying a shortlist of tried and tested organisations for us to talk to. Armed with the questions* Clinton provided us with, we have been able to identify the right organisation for us. Clinton also negotiated a significant reduction in potential fees which far outweighed the cost of employing him.
I have no hesitation in recommending Clinton"
*The client is probably referring to the set of five little e-books I've put together to arm them to make the best choice:
The Different Types of Broker Intermediaries
What To Expect From A Competent Broker
Key Questions To Ask Your Business Broker
Business Broker Fees & Fee Structures
What To Watch Out For In The Broker Contract
Case Study 3:
The founder of a software firm was hoping for a multi-million pound price. One problem: His business was pre-revenue—he had developed his product but hadn’t started trading. The best brokers don’t take these cases on because the work involved to sell them is high & the probability of sale is low. None of the specialist brokers dealing with multi-million pound tech businesses would even talk with our client. And our client recognised he needed them to reach the big Silicon Valley buyers.
Brief: This was a particularly difficult brief as the client did not have the cashflow to pay a large fee up front and the top technology brokers selling businesses in the £5m - £50m bracket expect in excess of £40,000 as a retainer.
I assembled a list of the top technology brokers in the world, not just the ones in the UK and worked on them, speaking with them and providing the documentation they needed to justify meeting with the client and taking on his business (despite the fact that the business hadn't started trading). I know what buttons to press with brokers and how to get them interested in a prospect business!
After opening several doors for the client and persuading some of the world’s top tech brokers to talk with / meet with him, he finally choose the best candidate. From not being willing to give him an interview, I got the broker so excited about selling his business that they reduced their retainer by £17,500 + VAT. And they did so without any increase in back end fees (the success fee was maintained at their standard 3% of sale price). At the time of going to press our client had signed their engagement letter and hopes to sell his business within 6—9 months.
The client was delighted with the result, the top technology brokers we arranged meetings / phone calls with and the terms we negotiated with the broker he choose. He has kindly offered to act as a referee and we can put you in touch with him on your request.
Case Study 4:
The owner of a small food business with a turnover of £280K had explored brokers including Turner Butler, Blacks, Intelligent Business Transfer and others. The broker he choose charged him a small fee up front and posted his business online. But that was the extent of their involvement - there was no active hunting for buyers. After six months of no leads, and a broker who wasn't responding to his queries, he asked for my help.
Brief: The client wanted a broker "who'll actually do something". I explained that not all brokers who charge an upfront fee are necessarily proactive with finding buyers. He decided to take my advice on setting the criteria for the broker search and fine tuning.
I first had to extricate the client from his existing broker contract (not an easy task in itself). Subsequently, I introduced him to a number of brokers - all proactive ones. He choose from the shortlist and paid the broker a small retainer.
The client sold his business in three months and sold it for more than the asking price he had with his previous broker. The "excess price" he achieved was 6x the advance fee he paid the broker. In addition, I negotiated the broker's “success fee” (percentage of final sale price) down. The client ended up paying 4% less than he would have paid with his original broker if that broker had managed to find him a buyer.
I do not have the seller's permission in this case to disclose his selling price and the exact commission he paid.
Update 2018: Note that I no longer do broker matching for small businesses like this one as it is exceptionally difficult to find quality brokers in the lower market (businesses with less than £1m in turnover, for example). Over 90% of the best brokers I approach turn these businesses down as being too small! So I created a different solution for smaller businesses. I call it the "Assisted DIY" option. Please get in touch to find out more.
When I wanted to sell my 3rd business I hired Clinton to use his vast network and his intimate understanding of the industry to help me find the right partner / broker. It was worth every penny.
Clinton opened doors for me, introduced me to the top investment bankers and business brokers who wouldn't normally have taken my call and, when I decided on a firm, Clinton, saved me £20,000+ of their advance fees. Most importantly, he matched me with a broker I would not have found myself, someone who I am confident is the spot-on right firm to successfully sell my business at the target price.
Clinton operates with 100% integrity. He provided astute advice, insights, cautions and tips all through the process of finding and signing a broker which I found invaluable. I would certainly use his services again.
I was recommended to Clinton as someone that could ensure we avoided the pitfalls that befall many that fall into the clutches of "brokers" that promise much, achieve little and charge lots! I am sure he would do that but his service in identifying proper companies that could help us was well worth his fee. We had an instant shortlist and it accelerated the process without the angst of worrying about the background of the company with whom we were in discussion.