It is true to say that in many things, timing is everything and disposing of your motor business is no exception. Judging the correct moment against a backdrop of varying franchise performance, economic factors, levels of future investment, franchise expiry dates (if on fixed contracts) and the business/owners needs can make this one of the more complex decisions and having the right advice is critical.
Preparing a business for sale is one of the most often neglected aspects of a disposal process. Typically there are many aspects that can assist to ensure that the business is presented in its most attractive way as well as ensuring that any subsequent sales process runs smoothly and to time. For example, a particular focus on balance sheet and working capital management can significantly enhance the prospects of success.
Understanding latest pricing trends, multiples and methods is essential to obtaining a true feel for the current value of your business.
A picture tells a thousand words and presenting the business in a manner that is attractive, concise and easy to follow is essential if you are to attract the attention of an acquirer who is likely to be short of time and will often make a very quick decision as to whether there is any interest in your business.
Perhaps the most crucial aspect of the process, ensuring that the shortlist of buyers is correct is fundamental to unlocking the best value in a disposal. As well as the established consolidator Plc’s, we are increasingly seeing alternative types of investor, particularly coming from private equity and international investors.
In many instances, a seller will sell a business only once in their lifetime and are up against experienced buying teams. The risks of negotiations not being optimised are significant in the absence of an experienced advisor to fight your corner and ensure that the deal is a fair one for all concerned.
Agreeing the key terms of a deal is only the beginning of a process to ensure that a deal progresses smoothly to its conclusion. Every deal will have its nuances and there will inevitably be surprises along the way which must be effectively managed to the satisfaction of both buyer and seller if the process is not to be aborted unnecessarily.
Tax on any capital gain
It is typically crucial that a deal is structured to ensure that any capital gain benefits from Entrepreneur’s relief, whereby the first £10m of lifetime gains are taxed at a very attractive rate of 10%. There are numerous planning steps to ensure that this relief is optimised and specialist advice is always recommended. Often, structures require time to implement and it is important to ensure that any such tax considerations are made well in advance (typically at least 12 months prior) of any planned exit date.
How we can help you?
Automotive accounting services – in addition to providing traditional accounting and audit services, we provide a number of bespoke dealer accounting services.
Automotive tax services – we will work with you to ensure the right strategies are put in place in order to minimise your tax burden and help you achieve your financial goals.
The next step