If you’re selling a business (UK), you may not want the acquisition to become common knowledge. Every year, most businesses are sold off-market, meaning they’re never listed for sale publicly.
As well as keeping the sale private, selling a business off-market is usually cheaper and faster. You’ll also have better control over who buys your business, which could impact its future.
In this guide, we’ll discuss the benefits of off-market selling in more depth. We’ll also explain how to sell a business privately with the help of a buy-side broker.
What Does Off-Market Mean when Selling a Business?
You may have heard the term before – but what is “selling off-market” in business acquisitions? In essence, it means selling your business directly to an interested buyer, without advertising on the public market.
You can do this in one of two ways: buy finding a buyer yourself, or through a buy-side business broker that works off-market. Either way, most business owners prefer to take this approach. The majority of acquisitions in the UK occur off the market – meaning it’s widely regarded as the best way to sell a business.
What Are the Benefits of Selling Off Market?
So, why sell off-market? There are many good reasons. Let’s take a look at the top four.
Avoid Extortionate Selling Fees
The most common reason for business owners to sell off-market is to avoid paying fees and commissions. Sell-side business brokers typically charge a flat rate for their advertising services – which may be thousands of pounds – plus a commission of 1% – 10% of the final sale price. They may also charge cancellation fees if you decide not to complete the sale.
By selling a business off-market to a private buyer, you won’t have to pay any broker fees. This means you’ll make a better profit from the sale.
On the public market, you may need to advertise your business for months before you receive any interest. Even after negotiation talks, potential buyers could back out at any point – leaving you back at square one.
Going off-market often results in a quicker sale. You’ll be matched directly with a genuine, serious buyer who won’t waste your time. And in case the sale falls through, your off-market business broker will have other potential buyers ready and waiting.
Control Who Buys Your Business
Most business owners are picky about whom they sell to – especially if they started their company from scratch. You’ll want to know that your employees are looked after and that your venture will continue to thrive.
Selling your business privately gives you much more control over who buys it. Your off-market broker will work with you to find and vet the perfect buyer: one who is experienced in the industry and whom you can trust to maintain your business’s reputation.
Keep Your Plans Private
There are many downsides to publicly announcing that you’re selling your business. For instance, your customers may take their business elsewhere out of fear that your products or prices will change. It may also cause anxiety and unrest amongst your employees – after all, around 30% of employees are made redundant after a merger or acquisition in the same industry.
When selling off market, the entire acquisition process is kept private. The only people who will know about the sale are you, your buyer, and your business broker.
How to Sell a Business Privately
Selling a business off-market clearly has several advantages. But how do you find a buyer when your business isn’t publicly advertised?
The answer is to find a professional business broker that specialises in off-market sales. This kind of broker acts as an intermediary between private sellers and those looking to acquire a business. They will:
- Match your company with a potential buyer
- Assist with due diligence
- Help negotiate the terms of sale
- Act as liaison between you and the buyer
- Offer expert advice throughout every stage of the acquisition
Always choose a buy-side business broker such as Chelsea Corporate. This means they get paid by the buyer, not the seller – so you won’t be charged selling fees.
Sell Your Business Off-Market with Chelsea Corporate
If you’re looking to sell a business, UK-based business brokers Chelsea Corporate can help. We are specialist merger and acquisition experts with a focus on off-market sales. Leave your details with us and we’ll get in touch when we’ve found you the perfect buyer.
Because we work for the buyer, you won’t have to pay fees or commissions if you sell through us. We guarantee a smooth, stress-free sales process, from initial negotiations to the post-sale transition period.