Business Sales Agents / Business Transfer Agents - All You Need To Know
What is a business sale agent? What is a business broker? Some FAQs
What is a business transfer agent / business sale agent?
There is no textbook definition for business transfer agent (business broker). However, anyone who calls himself a business transfer agent will be a person who assists business owners sell their businesses.
BTAs go by many names - business sales agents, business selling agents or simply business agents (there are also commercial real estate agents but they tend to sell just commercial freeholds).
These are all, in essence, business brokers (and we've got a more detailed article on business brokers). On this site the more popular business broker term is used to refer to both those who call themselves brokers and those who call themselves business transfer agents (or any of the variations thereof).
In some quarters it is believed that small business brokers, or brokers handling the sale of shops, restaurants and other "small" businesses are called business transfer agents while brokers handling the sale of larger businesses are called business brokers. But this is not true.
What is true, however, is that larger businesses - businesses with turnover of £5 million and above - tend to be sold by neither "business transfer agents" nor "business brokers" - they are sold by a whole range of different intermediaries such as corporate finance firms, M&A advisory firms and others.
Get in touch for a free consultation on the intermediaries who handle larger businesses. No, you won't usually find them in Google. However, we own the UK's largest data set on these intermediaries and the UK's largest directory of intermediaries. We use this data to advise owners of larger businesses on their options and on the firms best suited to take their specific business to market.
What qualifications do you need to become a business transfer agent or broker?
And this is the reason why the industy has attracted so many of the wrong types as discussed in this article and the industry has such a poor reputation. Here's how you can become a business broker yourself.
What regulatory supervision is there of business transfer agents in the UK?
In some US states these agents need to have a commercial real estate licence, but in the UK there is no such requirement and anybody can set themselves up as a business transfer agent without any registration or even filling a form!
Is there an industry trade body that can guide me on choosing a business transfer agent?
There is one called the Federation of Business Brokers, but it is owned by a business broker and had, at last count, just two or three brokers signed up as members. So, I wouldn't call it an industry body. Maybe it started out with that intention. But it looks like the whole project got ditched many years ago and someone forgot to take the website down.
There's the International Business Brokers Association (the IBBA), but membership of the IBBA may not confer what you think it does. Contact me privately if you wish to find out more. I'm not impressed by IBBA membership (but I do have a bit more respect for brokers who have the IBBA issued Certified Business Intermediary qualification).
Note, also, that there is nothing 'international' about the IBBA. Use of the word 'international' in the name is just posturing. The organisation should have really been called the American Business Brokers Association or ABBA. Perhaps the ABBA name was already taken!
Update 2020: There is now iTABB (Transaction Advisers & Business Brokers), a UK specific body. That site also has a directory of business brokers and business transfer agents powered by data we've supplied. (Most of the data we hold on brokers, corporate finance firms, agents etc is not disclosed publicly but we've shared a small portion with the above site.)
How much do business transfer agents charge?
Some charge nothing at all! They'll take your business on, advertise it for sale and take a commission only when it's sold. These are the brokers that account for most of the complaints about business brokers and most of the cases that end up in court.
But we have a guide here on fees and charges in this industry.
Why should I use a business transfer agent?
Agents themselves would claim that you have a better chance of selling your business if you use their services. And a better chance of getting the price you want.
While it may help some businesses to have professional representation, that's not true of all businesses. Most small businesses, especially businesses with a turnover of under £2 million, may want to consider a DIY sale. We do not recommend using a business broker / agent to sell a smaller business.
In any case , "business transfer agents" have long been getting bad press ... for good reason. Try this search in Google.
If you get the choice right, however, a good business broker can be an invaluable aid and provide all the advice, guidance and assistance to sell your business successfully and safely. We maintain the UK's largest knowledge base on brokers - which includes everything from their sector specialisation to their reputation, their fees and much more. We can assist to match you with the right broker ... and get you the right deal with the broker you decide to use. Read more about this service here.
I made the mistake of hiring the wrong business transfer agent, what should I do?
This is a common problem. It's very difficult to get out of some of these contracts. I do have advice I give clients who come to me a bit late in the day and after they've signed one of these notorious contracts, but if you are not one of my clients an organisation called CEBTA may be able to get some publicity for your case.
How do business transfer agents get their clients?
Usually by cold calling and/or offering a "free business valuation". They often claim to have thousands of buyers desperately looking to buy businesses just like yours.
The free valuation is often just a pie in the sky figure. They also know that business owners can't verify the "thousands of buyers" claim.
Some brokers run free (or paid) seminars where they explain to business owners about the sale process. These seminars are great opportunities for them to sign up new clients.
How do I find a reputable and competent business transfer agent?
We maintain the UK's largest database on business brokers - where they're based, what types of businesses they specialise in selling, how much they charge, what their reputation in the market is etc. Here's a brief directory listing demonstrating that there are literally hundreds of business brokers in the UK. And here's a little snapshot from our database showing you the vast talent available in the UK.
Our broker review section has detailed reviews on a select few of the brokers in our database ...and we share some of the vast volume of information and intelligence we have on these brokers. So if you're considering some of the best known brokers around, you'll find we have a page each one such as KBS / Knightsbridge Corporate, Intelligent Business Transfer, RTA etc.
If you want more advice on brokers, or need assistance finding the right broker for your business, download our free guide on using the right broker to get 50% - 200% more for your business. Or get in touch.