It is said there are two certainties in life, death and taxes; now we must add Coronavirus. This new certainty will be with us for some time and with it, economic damage and social impact. Part of that social impact may well be to examine what we want out of life. For certain a consequence is to appreciate life more and perhaps enjoy the simpler things. Many owner-managers will think that because of a weaker economic or business performance that now will be a bad time to sell their companies.
Is now a good time to sell?
Timing on a sale is said to be the key to the definition of good. With capital gains tax increases in the last budget and now an economic slow-down the answer must be no, it’s not a good time to sell, however, is it bad? The answer surprisingly is no, trade buyers remain under increasing pressure to change their business models and create scale, and Private Equity is literally overspilling with cash chasing too few deals. Private Equity may also be an excellent route to a partial sale, de-risk and bringing growth capital to your business.
There are buyers and options, yet there are too few quality companies coming to market. This may mean that buyers will be chasing you; Keynes‘ Law states that demand creates its own supply. COVID 19 is an extraordinary event that can be modelled against, so it is still entirely possible to present good numbers for a good deal.
Is it enough?
Buyers will be mindful that there may well be value players, but also the strategy to gain economies exists with even more force in recessionary times. Buyers are thus active, have money and want to do deals. Yes, you will after the March budget probably pay more tax (20%) although there is the consideration that there may be a saving later on inheritance tax. Many owners may well now be evaluating their options; take a loan to weather the pandemic storm and see the next cycle out (5 years?) or embrace the new certainties and still find the best deal for you. In this respect, we have the ‘title’ question when is enough, enough? Many entrepreneurs don’t seek advice on what numbers work directly for them. To this aim we have several key financial advisors who can help you, with just a little time invested in your ‘whole of life’ planning by answering the question, do you have enough to sell?
What do you need?
The three exit foundations when selling are your business and its strategy, your family and thirdly you as an individual. Well as an individual why not find out your number? Working with you and our financial advisory team we can without obligation create a clear plan as to when indeed enough is enough, helping you make the best decisions and exit timing for the company, family and you.
Call +44 (0)1737 240888 in confidence or email firstname.lastname@example.org to book your objective, no-obligation financial review.