Frequently Asked Questions
1. How much can I get for my business?
For small businesses, the most used valuation method is multiples of EBITDA (earnings before interest, taxes, depreciation and amortisation).
Depending on a number of factors including the EBITDA, the size of company, annual turnover and sector, a business seller can expect to receive a price that varies between 2xEBITDA up to 5xEBITDA, with majority of business valuation at around 2 to 3 times EBITDA for smaller businesses with up to £/$5M turnover (or up to £/$1M EBITDA) per year and going up on a sliding scale for medium size businesses with larger turnover and EBITDA values.
2. Why sell your business direct to me? Because 80-95% of businesses listed for sale through brokers DO NOT EVER SELL!
It is a well known fact by the business buyers and still not very well known by the business sellers that listing your business for sale through a broker rarely leads to a sale.
Why is that? Because business sellers most of the times do not have the correct information on how to value their own business and rely on brokers to produce the valuation for them.
With the disclaimer that there are still exceptional brokers out there who are the exception to what I am about to say next, it is not in the brokers’ interest to give the seller the real, reasonable and achievable valuation because they will not be getting the commissions from having the business listed for sale for months and years to come.
The main reason by far why most businesses do not sell is because the price is too high.
That means most of the time the brokers build unreasonable expectations in terms of achievable sale price and the business never gets sold.
Don’t take my word for it, just do a Google search “How many businesses sell through a broker” and add your country to the key word search.
Also, take this into account: the smaller the business size, the higher the risk and the lower the valuation, as in the lower the EBITDA multiple. I had business brokers attempting to sell small businesses for 7x to 10xEBITDA which should tell you how unrealistic the expectations built by some of these brokers into the minds of the sellers really are.
This is a huge problem and the main reason why smaller businesses listed through brokers rarely sell.
3. Business valuation comparable data
Sold business prices are published in the United States on a quarterly basis and these are used as comparables for valuation purposes for businesses available for sale around the world including in the UK and Europe where there is no similar data published. The US data can be found here:
4. What are the geographic regions and sectors I am buying in?
I am interested to connect with business owners looking to sale their businesses located in the UK, the US and Europe mainly.
All business sectors considered. I do have a special interest in manufacturing businesses, professional services (consulting, recruiting, legal, accounting), media and advertising, financial services (payments, banking, bullion investing, etc) just to name a few.
I am a member of a few established investor networks and if I cannot help, I can and will put you in contact with fellow direct investors that may be interested in your geographic region and sector.
5. What size of business I am buying?
All business sizes considered as long as there is a management team in place that can stay on and manage the day to day business operations and can run the business after the sale while I focus on growth and expansion.
Preferences are minimum £/$2M/year up to £/$10M+/year turnover or equivalent currency.
6. How long it takes to complete the deal?
I am an experienced business professional, with 20+ years in financial services and mergers and acquisitions. I do not use intermediaries so I am in a position to move quickly and have a deal signed in 3-4 months, depending on being a great fit for each other.
I only ask that if you do use legal assistance for yourself, we continue to deal with each other directly and you will not expect me to deal with the legal person acting on your behalf. I've seen so many deals being delayed or worse, cancelled because of 3rd party interference.
7. What is the expected time commitment for the transition period from you as the seller?
For a successful deal and transition, a time commitment of minimum 6 months to 1 year from your part while I learn the business would be ideal so I can have the right level of support.
8. Funding the acquisition
To finance the business acquisitions I use a combination of equity and debt financing.