About 2 years ago I valued a small business at about £60,000. The client was a little disappointed and said could we ask £80,000 so I agreed. After all there is no "right" price for a business and the vendor did have fantastic premises on a really low rent through the local council so I thought we might get some extra valaue there.
I took instructions to sell the business and we had a few viewings but no real interest or offers were forthcoming.
So, about 6 months or so later my client was tele-canvassed by a major business broker. Something along the lines of ... "do you want to sell your business? We're the biggest, we're the best, come talk to us" My client was seduced by their big talk and met one of their valuers who valued the business at ... wait for it .....£99,950. So he says "we'll sell this, no problem, blah, blah, blah". She was convinced and signed up there and then, handing over a cheque for their big fat upfront fee as well.
She called me to tell me what she'd done. "Oh dear, oh dear, oh dear" says I. "These guys are pretty useless, can you cancel the agreement?" It turned out she couldn't and decided to give them a go, especially as she had signed up for a 12 month agreement. She did ask them to drop the price a bit though.
I told her I would continue to market the business (at the new price) and, guess what, I got an offer of £80k. Well, to cut a long story short the offer didn't go ahead. The buyer was good for the money and wanted to proceed but my client felt he was going to make too many changes and wouldn't give her assurances that staff jobs were safe. But I got an offer. And there was also another buyer who wnated the business but couldn't raise the funds.
Meanwhile the other broker seemed to be doing nothing apart from posting a gushing advert on their website. You know the sort of thing..... best business in town, fantastic opportunity etc. etc. blah etc.
So, 12 months later here we are. The other broker didn't get a single viewing, offer or interest and my client has terminated her agreement with them. I'm sure they are not too sorry as they are also charging her an exit fee on top of the initial fee she has already paid. (We don't charge exit fees).
Although she never really left me as a client she is coming back on with Anderson Moore as sole agent. Watch this space.
Partner - Anderson Moore
Keith Green - selling businesses and advising SME business owners since 1997 and still enjoying it.
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