As a shop owner, you wouldn’t let anyone walk in off the street to operate your tills. So why would you do that when selling your business? Getting the right advice and choosing the right adviser is essential so here are a few things to look for and advice on how to avoid the classic mistakes.
A decision to sell your shop is not one you would have taken lightly — for many in this arena, convenience retail is a vocation, and one that a great number dedicate their whole working lives towards.
But if you are looking to appoint an agent or business adviser, you can avoid unnecessary costs and aggravation by following a few simple rules.
Check the professional integrity of the agent. A reputable firm will be associated with a governing body such as the Royal Institution of Chartered Surveyors or National Association of Estate Agents. Anyone can become an estate agent but membership of either of these bodies means you are dealing with a reputable business.
But what should you look for? In short, professionalism! Your adviser should be able to demonstrate the ability to sell your business at the best price and within the optimum time frame. Of course, this will depend on your personal circumstances and a good agent will spend some time finding out about, and being flexible towards these.
Your adviser should also demonstrate a good working knowledge of the market along with evidence of recommendations from satisfied clients. Remember, you are going to have a working relationship with this person that may last quite a while, so it’s always better to employ someone with whom you will get on well.
The best agent is not always the one who values your store at the highest price. It is easy for an agent to pitch on the ‘high side’ and get the instruction, but it will be your loss if your business hangs around on the market because it is not realistically priced. A good structured marketing campaign is essential if the sale of your business is to proceed smoothly and your agent should outline the activities that will be undertaken to sell your business.
A helpful hint is to use an agent which has an extensive and interactive website, as the internet is by far the most popular method for searching for opportunities.
Search the internet for businesses for sale like yours (for example, shop for sale/convenience store for sale). See if the agent’s website appears on the first page of results. If not, are prospective buyers going to find your business?
You should expect regular feedback. Ensure the agent you choose will personally keep you updated with progress.
Even if there is little interest in your business, you, as the vendor need to know why. Feedback from viewers will help you address any issues or problems that are putting off prospective buyers. It is a legal obligation for the estate agent to pass any offers on to the vendor as soon as is practicably possible. Therefore, check that the agent has a suitable office procedure to deal with offers.
How much will all this cost? A good agent will provide initial advice free of charge, furnishing you with recommendations to help you decide whether to market your business through that particular agent. Ask your agent to carefully explain how fees will be payable.
Watch out especially for onerous withdrawal fees on which some unscrupulous agents rely when they haven’t found you a buyer!
Your contract with the agent will probably be one of two types. ‘Selling rights’ is where you pay the agent if he successfully introduces a buyer who completes a sale. This enables multiple agency, but can be more expensive.
The second method is ‘sole selling rights’ where the agent will be entitled to his fees no matter how the buyer is introduced to the property – it could be through the agent or someone else entirely.
This can be cheaper (with one agent promoting the property) and the agent can control the marketing of the property and is the only point of contact for the vendor, which tends to make life simpler and less time consuming for the client.
Where marketing results in more than one buyer, a good agent instructed with a sole selling rights agreement will also be able to orchestrate competitive bidding to achieve the best price.
Insider tip
Ask the agent how his salary is paid. If it is success-related (for example, based on a percentage of the commission achieved), he is more likely to be incentivised to get your property sold at the best price in the shortest time.
Five top tips for tip top sale
- Look for RICS or NAEA membership
- Look at web rankings for your agent
- Accept the valuation at face value – highest not always best
- Compare online and offline marketing tools
- Check the small print on the contract!