Are you preparing your business for sale?
Are you keen to maximise the value of your business through the sale process?
You may not yet be thinking about preparing your business for sale, but your circumstances may change. You may even receive an unsolicited approach from a third party who is interested in acquiring your business, we see that often, or you may just decide that you do wish to exit.
Have you considered that a change of Government may see an increase in capital gains tax? For some, this might be all the incentive needed to encourage you to exit your business, sooner rather than later.
In any event, if you do decide to exit, now is the time to start preparing your business for sale.
So, the next question is, how can you protect the value of the business you have created? and; How can you ensure you get the best terms and conditions in a sale transaction?
We asked Philip Bird, our Corporate Finance Partner, and Tim Humphries, our Tax Partner, to provide us with 10 tips that business owners can consider when preparing their business for sale.
Here are our top ten tips when preparing your business for sale:
1. Prepare your business for a sales process in advance – seek advice from corporate finance advisers, such as RPGCC, who can help review key areas of your business which will underpin value and attractiveness to potential acquirors.
2. Look at incentivising key employees, through incentives such as share option schemes, so that they are bought in and invested in the continued success of your business.
3. Look at whether you have the appropriate management team and structure in place, including a succession plan.
4. Make sure that you have appropriate commercial agreements with your key customers, including term contracts wherever possible.
5. Have a business plan and strategy which can be simply communicated, and one which identifies growth opportunities.
6. Consider the structure of the business ahead of a sale, you may not want to sell all of it, so working out how to split it up ahead of time without creating any tax charges.
7. Conversely some people have various companies which may be more valuable if brought together under one-roof, so a merger may be in of the offing.
8. A potential buyer will take a deep dive into your books so undertake your own review first to make sure everything is in order.
9. Have you considered tax efficiency? Would it be more tax efficient to spread any gain arising on sale around the family by transferring shares.
10. Often the company qualifies from reliefs from Inheritance tax. Selling it for cash could expose your estate to significant inheritance tax exposure. Did you know that planning ahead of time can help mitigate the inheritance tax impact of selling your business?
These are just a few areas that will make your business more attractive to potential acquirors, protect and increase its value, and ensure a smoother exit process.
RPGCC’s Corporate Finance and Tax teams are experts in working with business owners they help with all aspects of preparing your business for sale.
They work with business owners engaged with the business sales process by undertaking many of the necessary review processes or due diligence assignments which form part of the sales process. Our involvement helps you, the business owner, achieve better terms and conditions from your sale and helps to minimise the tax due on any capital gain.
Once you have decided that the time is right to sell your business, the RPGCC are happy to provide you with confidential advice and guide you through a structured sale process which involves identification of, approach to, and negotiation with potential business acquirors.
For further information on how we can help in the sales and exit process please contact us or telephone us on 020 7870 9050 and speak to our Corporate Finance team or our Head of Tax, Tim Humphries.
