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Is now a good time to sell your business?
A raft of entrepreneurs put the ‘for sale’ sign up prior to the implications of the Budget 2008 kicking in on April 6. Former businesswoman of the year Dawn Gibbins of Flowcrete, William Chase of Tyrrells Potato Chips, and Mike Clare of the hugely successful beds brand Dreams all sold their majority stakes, presumably to take advantage of changes to capital gains tax taper relief. But after the rush there has been a steady flow of entrepreneurs exiting – so should you be thinking about it? What would advisors advise? Tell us now.
A raft of entrepreneurs put the ‘for sale’ sign up prior to the implications of the Budget 2008 kicking in on April 6. Former businesswoman of the year Dawn Gibbins of Flowcrete, William Chase of Tyrrells Potato Chips, and Mike Clare of the hugely successful beds brand Dreams all sold their majority stakes, presumably to take advantage of changes to capital gains tax taper relief. But after the rush there has been a steady flow of entrepreneurs exiting – so should you be thinking about it? What would advisors advise? Tell us now.
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There is a reason why if you are thinking about selling your business in the next few months, why you should do it now. The reason is the introduction of Energy Performance Certificates into the commercial market.
Basically after 1 October 2008 as soon as you place your business and premises on the market you will need to commission an EPC, the cost of which is currently unknown as it is a new product, however as this EPC could take an inspector a couple of days to complete it is unlikely to be cheap. £1,000 or so has been mentioned.
Obviously this is £1,000 that you would have to spend upfront to place your business on the market and is in addition to any registration fee an agent may require from you.
So my advice would be if you want sell in the next year put in on the market now which a reputate agent and save yourself some money.
Horizon Business Agents www.horizonbusinessagents.co.uk
Good point and not something that would necessarily spring to mind. To play devil's advocate though, if you're selling now there's obviously the economic climate to bear in mind.
With thousands being wiped off property prices those businesses where commercial premises are part of the package (and possibly the main asset) would presumably stand to lose more than the £1,000 mentioned.
While none of us knows for sure how long we'd have to wait for conditions to pick up I guess it's worth considering whether you're in a position to hold out and sell when the economy improves and prices begin to rise again.
If, by then you've received and paid for an EPC certificate is it right to suggest that more energy efficient commercial buildings could command something of a premium? Are there other reasons besides that make selling now a good option?
If you NEED to sell because you intend to retire, emigrate etc, holding on for a year is not going to make a lot of difference to your properties value.
There may be a logic even if you don't want to sell your property in commissioning a commercial EPC and implementing the recommendations. Why? Becasue it would improve the energy efficiency of your premises, cut your costs, increase your profits, and increase the value of your business. Simply look at it as in investment, which would reap rewards in the short term.
Whether the premises would sell for a premium as well. I would guess that it depends on whether the buyer understood what it would mean to him. EPC's have been applicable to the residential market for a while now, do buyers offer a premium in that market for property with a high rating?
Selling businesses is also highly seasonal, basically people when they have some sun on their backs feel more confident. If you were to wait until the Winter to sell, the changes are that you will be waiting for next spring because simply Winter enquiry levels can be 10% of summer enquiry levels.
Horizon Business Agents www.horizonbusinessagents.co.uk