Selling my business. Exploring the pre-sale stage

At this stage in your business exit journey, it’s important to explore the options available, understand the best solution, think about what you need from the sale of the business and start to build your strategy to secure the best outcome.

At Evelyn Partners, we understand that your personal and business wealth are intertwined. Through our 360° advice, we make sure that actions in one area do not negatively impact another.

The pre-exit stage can be a lengthy one and important decisions should not be rushed. In some cases, the best option may be not to exit your business at this time.

We will help you consider the options and choose what is right for you, provide clarity on whether to transfer any wealth before the sale and look at how to improve your business to maximise the deal value.

If you work with a professional adviser in the early stages of your business exit, the more successful it is likely to be.

There are different business exit options available. It’s important to think about which approach works best for everyone, including yourself and the future buyer. It could involve:

• An external exit, via a trade buyer or private equity (PE)
• A structured exit, potentially via a management buyout (MBO) or employee ownership trust (EOT)
• Passing on the business to the next generation via family succession

Developing a business exit strategy is crucial for achieving your desired outcome. It helps ensure that you can exit in the way that is best for you and your needs.

As part of our corporate finance advice, our experts will take the time to get to know you and your business, so our advice forms a bespoke, tailored strategy centred around your financial situation. Each option will be discussed and analysed with you.

To achieve the maximum sale price for your business, you need to make sure that the company is ‘exit ready’. It’s important to look at the company from the prospective buyer’s perspective.

Our team of advisory consultants will work with you to create an exit readiness assessment. During this process, we will consider just how ready your business is to sell. We look at:

• Vendor due diligence
• Performance track record
• Whether you are clear on the USPs and strategy of the business
• If you have a succession plan in place
• The numbers and if they are moving in the right direction

If we find any cause for concern, we will support you in resolving the situation before it becomes a problem for a buyer.

Business structure

Before exiting, it’s worth reviewing your current business structure to see if it is appropriate from both a commercial and a tax perspective. We work extensively with businesses and their shareholders to make sure that it works in its current form or suggest and implement any necessary changes. By doing so, we also make sure that any available HMRC-approved tax incentives and reliefs are utilised and maximised.

Business owners often restructure their business before exiting for commercial reasons. In these cases, we work with the business to ensure such restructuring is undertaken tax-efficiently, obtaining HMRC advance clearance (where appropriate).

Tax review

It is likely that during the business exit process, the prospective buyer will undertake tax due diligence on your business. This is usually carried out with the aim of identifying any historical tax issues or risks, upon which HMRC could still challenge a filed tax position. Any tax issues identified, together with potential interest and penalty charges, may then reduce the purchase price or negatively impact the transaction.

We will work with you to assess these legacy issues before the sale and actively address and correct them with HMRC.

As well as reducing the risk of a tax challenge on exit, this results in a smoother and quicker tax due diligence process.

It’s vital to work out how much you need from the sale of your business to fund the next chapter of your life, whether that’s starting a new venture or retiring. It’s important to make the distinction between how much you need and what you want. In many cases, this can be significantly different.

To establish how much you and your family need to fund your future, as part of our financial planning service, we use a specialist cashflow modelling tool to demonstrate realistic scenarios and assumptions, taking into account your personal preferences and tax situation.

A long-term projection of your finances can then be created, showing your future requirements alongside the business sale figure you need. We also use bespoke tools to see how you can get the most out of the business to look after your family’s wealth on a long-term basis.

As part of this forecasting, we look at the available tax incentives and reliefs that may be available to you. Our personal tax specialists have extensive experience of maximising available reliefs for high-net-worth individuals.

No matter where you are in the pre-sale stage of selling your business, our team can help. Our experts specialise in a wide range of services and and will help you receive the sale value you need from your business in a timely and seamless manner.

For more information, book your free exit readiness assessment online or by calling 020 7189 2400.