FAQs

The answer is, usually, that some corporate finance advisers/brokers give inflated valuations in order to 'entice' a client to appoint them to sell their business. Anderson Shaw aims to give a realistic valuation that can be used to enable the vendor to make an informed decision about whether or not to sell and to plan his/her financial affairs post sale. We will not undertake the sale of a business unless we are satisfied that the vendor’s expectations of value are aligned with our own. The same honesty and integrity will be applied in all of our dealings with our client throughout the process.

The whole of the sale process will be handled by either Peter Wilson, Richard Anderson or Chris Elliott. Unlike dealing with larger organisations the same person will discuss a valuation with you, visit the business, write the Briefing Document, and market the business. The depth of knowledge gained about the business through this process translates to talking more intelligently about the business to potential buyers, negotiating to Heads of Terms more effectively on the vendor’s behalf, and, we believe, ultimately achieving a more successful sale.

We always aim to deliver 2 or more parties prepared to table offers, but this does not usually lead to an auction or sealed bid process. In our experience buyers do not like this type of process and they react better to quiet encouragement from us to make their best bid. Ultimately, the vendor will almost certainly prefer one of the offers over the other(s) and this will not always be driven by price. There are many factors that determine the attractiveness of an offer including: time required to complete the deal; the structure of the offer; the level of handover required and personal chemistry between buyer and seller. An important skill of the adviser is in keeping the 2nd and 3rd parties 'warm' and the relationship good, should the deal with the 1st choice fail to complete.

In our experience, advertising without a Guide Price does not lead to 'fantastic' offers but to 'silly' ones that simply frustrate the process. We have the experience and expertise to set a sensible Guide Price for businesses operating in the manufacturing, engineering and B2B service sectors. Listing a business for sale with an undisclosed price puts off many buyers, and others who search business sale websites using price as a criteria will not typically find a business without a Guide Price.

Our records show that Anderson Shaw currently successfully sells 85% of those businesses we are mandated to sell. We measure this on a rolling 3 year average and exclude those businesses that don’t sell for reasons beyond our control. Reasons beyond our control include: a significant deterioration in the performance of the business; a problem with the buyer/buying company; a change in personal circumstances; major economic shocks etc.

We believe this success rate is higher than most other Corporate Finance Advisers/Business Brokers for good reasons:

• We only sell businesses operating in the manufacturing, engineering and B2B services sectors, and we believe this specialisation contributes to our success.
• We only typically represent 10 to 12 businesses at any one time and this means that success in each and every case becomes a matter of personal pride (and financial necessity!). If a business is ‘sticking’ for any reason our reaction is to redouble our marketing efforts, not move onto the next project.
• Our fees are almost usually heavily dependent on achieving a successful outcome, which we believe is the right approach. We expect to be rewarded if we succeed, but not if we fail.

This is often a major concern for vendors. We will do everything we can to avoid leaks. When we market a business, we always do so on an anonymous basis. When buyers ask for further details, before providing these, we check that they are bona fide and ensure they sign up to a Confidentiality Agreement. Sometimes it makes sense for vendors to brief key employees/suppliers/customers about their plans in case, despite our best efforts, a leak happens and because, of course, they will need to know in any event once a sale is going through.

It depends on the size of the transaction. We always charge a small commitment fee when our Business Sale Agreement is signed.

For most sales, the remainder of our fee then depends upon the successful sale of the business and this is generally up to 5% of the consideration achieved. We also charge, usually, 2 progress payments at key milestones in the project as a contribution to our costs and these payments are deductible from the success fee.

For larger sales, we are happy to agree a day rate basis for the work that we do in combination with a lower success fee and guaranteeing that, overall the client pays less as a quid pro quo for paying more along the way.

For smaller sales, we can charge clients less by agreeing to limit the number of visits we make to 2, 1 to finalise the Sales Document and the other to accompany the first buyer visit. After this we continue to manage all aspects of the process dealing with buyers via email and telephone rather than face to face. We have found that this works well for small, straight-forward sales.

We are always amenable to discussing alternative fee structures.