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It is often useful, now that we have the Internet, to look at how comparable businesses are marketed in another country, as perhaps they have new ideas that could be applied in your country.

In America TV advertising simply delivers a message, where as in the UK advertising agencies seem to want to entertain, often the message is lost. How many times do you watch a TV advert and not remember what product it was supposed to be promoting?

This is perhaps due to cultural reasons, British people do not like “in your face” marketing, or maybe it is because airtime in America costs more. Once again, companies in the UK simply add on the cost of advertising to the consumer, US advertising seems to focus on the cost benefits of the product.

In America business transfer agents are called business brokers, and it seems that generally speaking the way that their portfolio is presented to buyers is generally the same. Brokers in the US however don’t seem to provide photographs of the business, indicating that US buyers are not concerned with how a business looks, the financial information is more important to them.

The finance aspects of a business transfer is the main difference, whereas in the UK agents charge 3% – 5% of the sale price on a successful sale, brokers in the US charge 10% – 12% with minimum commission of $15,000 being quoted.

This is where the difference lies, business transfer agents advertise a business and introduce the parties, the finance for that business is provided by banks and other financial institutions. In the US, seller financing is the norm, where the seller provides the loan to the buyer to buy the business, the broker is involved in brokering the deal, not only the priced agreed but the repayment schedule.

It is the norm for the buyer to put down a deposit say 25 – 30% of the purchase price with the balance being repayable over maybe 5 years.

So why don’t British business owners offer the same deal? Often because they want a clean break, or maybe because they are not certain about the strength of their own business.

However if business owners had more confidence in their own businesses and offered finance to the buyer, they would be more likely to sell and get a higher price.

Maybe this is the area where business owners can learn from our US cousins where selling a business is concerned.

This entry was posted on 08/04/2009 at 02:07 pm and is filed under Selling Your Business, Business transfer agents. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.