Advice & FAQs
Buying a Business
Having expert professional help on board is invaluable when you buy a business and reflects the success of our network of nationwide consultants.
Getting it right from the outset is where the Business Partnership comes in, as we have extensive experience of a wide range of sectors to guide you through every step of the buying process. We also have contacts with highly experienced solicitors, accountants and financial advisers, and can introduce you to a team of professional specialists dealing with acquisitions.
The Business Partnership will also help and support you in the decision making process and act as mediators throughout the negotiation stages if required.
Business Valuation
The Business Partnership is highly experienced at valuing businesses and is able to provide specific advice about the recommended asking price for your business. We can explain the various valuation methods, and provide you with up-to-date market intelligence.
In practice, arriving at a recommended asking price involves various factors which can include: the history of the business; current sales, turnover and profit; the overall financial position in terms of creditors and debtors; cash flow; equipment assets; property and leases etc. The reasons for the business being sold also need to be taken into consideration.
Other considerations are intangible assets, which reflect the business or company’s reputation including goodwill, customer relationships and contacts, intellectual property, etc. Price is frequently a matter for negotiation and the asking price is a benchmark or starting point for the negotiations.
Selling a Business
Maximising the sale of a business can often represent one of the largest transactions of your life, which is why it is absolutely crucial to appoint experienced professionals who know and understand your industry or market sector.
Understanding the dynamics of the business, reasons for the sale and working with the vendor, in bringing it to the market at the right time, are all part of our success equation.
Services include:
There’s usually only one chance to make the biggest decision of your life, so it makes sense to use the experts in selling local businesses nationwide.
Preparing a Business for Sale
In order to maximise the value of your business, we recommend investing time in reviewing all financial aspects to ensure that the accounts are presented in the best possible light. This may involve cutting overheads, reducing debt and stock levels to enhance and increase profitability.
Once this process has been completed, a more accurate valuation of the business can be progressed to incorporate the property and assets.
Up-to-date audited accounts and accurate forecasts for the year ahead will also be required, as information of this nature will be requested by potential buyers prior to making an indicative offer.
Preparing a Sales Memorandum concludes this part of the process and is developed by The Business Partnership as marketing literature. It outlines details about the business, its origins and background, and highlights key features and benefits, as well as financial information relating to turnover and profit.
Negotiating the Deal
The Business Partnership is highly experienced in stage managing negotiations during the sale and purchase of businesses for clients.
Central to the success of any deal is for both parties to ‘win’ and our consultants’ expertise in handling this process or acting as mediators is a fundamental part of our service.
This is often a stressful and time intensive process and the merits of having one of our consultants as a sounding board, mentor and professional advisor is also invaluable.
Raising the Finance
The Business Partnership can help you raise the finance to fund your acquisition and make sure it meets your specific needs.
Choosing the right vehicle is essential in helping your business succeed and our network of consultants will guide you through the various sources of finance available, which are most likely to be relevant to you and your venture.
We also understand the mine field of government schemes which offer financial assistance and free or subsidised services to start-ups, in addition to having special contacts with high street lenders, asset finance and factoring companies.
Legal Aspects
The importance of having an experienced and specialist lawyer to handle the sale or purchase is crucial, as there are many factors and implications to consider. This involves the preparation of a range of legal documents, as well as advice on how the deal is structured.
The first stage includes the development of a non-disclosure agreement for prospective purchasers to sign, which is essential when releasing commercially sensitive information to third parties. Once an initial agreement has been made, this is followed by the Heads of Terms, which sets out the key points of the deal, i.e. payment structure, costs, assets etc.
The Sale Agreement highlights the complexities of the offer and reflects the responsibilities the business or key personnel have in respect of employees, outstanding debts, VAT and tax obligations in the form of warranties and indemnities. These provide legal confirmation about facts relating to the sale or purchase of the business and protect the buyer from any losses resulting from specified future events.
Accountancy Advice
Involving your accountants from the outset is essential, as a co-ordinated approach reflects best practice in selling or buying a business.
Once the initial Heads of Terms are agreed, the purchaser will wish to investigate the business to substantiate their offer. This process is known as due diligence and involves the purchaser reviewing all the commercial aspects of the business such as contracts with customers, staff and suppliers. In addition it covers past performance, legal and tax compliance, as well as the valuation of property and other assets.
As it is likely you will have to pay Capital Gains Tax (CGT) on the sale of your business, it is important to assess ways in which to minimise liabilities by taking advantage of the relief available. Your accountant or representative from The Business Partnership can provide you with the appropriate advice in this respect.
Energy Performance Certificates (EPC)
New Government legislation in effect from the 1st October 2008 requires all sellers and landlords to provide an Energy Performance Certificate (EPC) for all commercial buildings, or indeed parts of buildings (including commercial buildings, such as offices, shops, etc) when they are constructed, sold or rented.
An EPC provides information on the energy efficiency and carbon emissions of a building, together with ways to 'improve' these figures. The seller or landlord is responsible for ensuring that the EPC is made available to the prospective buyer or tenant at the earliest opportunity and no later than when a viewing is conducted or when written information is provided about the building i.e. sales particulars.
The Business Partnership has teamed up with a market leading provider of commercial EPC’s to negotiate great discounts on your behalf. For information on EPC’s for non – domestic dwellings please contact enquiries@business-partnership.com.
Frequently Asked Questions
There are a few exceptions to the requirement for EPC's, namely: -
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In addition to the above, some 'transactions' will not require an EPC:-