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27th June, 2017
Owning your own business is very fulfilling, you are no doubt doing something you both enjoy and are very good at. This will have enabled you to both succeed and build something that is of real value which provides for your own families and those of your staff.
However, staff do retire or leave and I am sure no one really wants to work forever. At some point, a time will come when you want to:
If you have ever considered any of the above it could now be a great time to consider the succession plan for your business. This will not be an overnight process as the perfect exit can take 18 – 24 months to execute or maybe longer. However, we are currently seeing a number of market features which could make it the right time to sell:
Good Market Conditions
Corporate and Private Equity Investors have large amounts of cash available and many are looking to invest to enhance their returns. This is driving an increased appetite to negotiate deals and is providing some support to stronger valuations being achieved for sellers.
Timing is Everything
Every business has a degree of business risk from external forces; the economy, regulation, technology, the list goes on. The success and momentum of today may not be sustainable forever. If you can reach your aspirational number to sell, now may be the time to capitalise on the hard work and risk you have invested and taken over the years.
This is a very attractive tax concession but will Entrepreneurs Relief remain at current levels? I do not know but whilst it does, it is an attractive tax relief that can be captured in a sale.
Stay Ahead of the Crowd
The demographic of owner managed businesses is increasing, partly as the baby boomer generation reach their late 50s / 60s.
This may mean that we will see an increase in businesses coming to market, which could result in the basic economics of supply and demand creating downward pressure on valuations. Sell now before the rush?
If you are considering your future (and in terms of business succession planning it can / should take two – three years) are you doing anything about it? If you would like a free no obligation discussion around options on who to sell to, the process, and valuation, please call Mark Hislop, Corporate Finance Director at Advantage Accountancy & Advisory Ltd on 02922 331169.
It could be the best hour you will ever spend discussing your business.