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 what a business transfer agent is or does. However, anyone who calls himself a business transfer agent will be a person who assists business owners sell their businesses.
They go by many names - business sales agents, business selling agents, commercial real estate agents or simply business agents. But they are all, in essence, business brokers. On this site the more popular business brokers 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 handing the sale of shops, resturants and other "small" businesses are called business transfer agents and business brokers handle the sale of larger businesses, but this is not true.
What is true, however, is that larger businesses - businesses with turnover of £5 million and above tend to be handled by neither "business transfer agents" nor "business brokers". Get in touch for a free consultation on the intermediaries who handle larger businesses (no, you won't usually find them in Google).
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 in 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 has hardly any members, so not really an industry body as such.
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.
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 there 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. 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. Sign up for the newsletter if you wish to learn more about choosing the right business broker.
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?
I 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 of the hundreds of business brokers in the UK.
If you want some more advice on brokers, or need assistance finding the right broker for your business, download my free guide on using the right broker to get 50% - 200% more for your business. Or get in touch.