Selling a business in uncertain times

Sarah Healey Pearce, Director of Corporate Finance considers what the ‘B’ word may mean for business owners who are thinking of selling their firm.
 
I hate to mention the ‘B’ word but as we head towards Brexit Day with still no clear idea of what is going to happen, businesses are definitely starting to feel the effects. In the corporate finance world, buyers are becoming more nervous and deals are slowing down, so I suspect that the next few months are going to be interesting. If you are trying to sell your business, is there anything you can do to keep things moving?
 
Being clear about how the different scenarios will affect you and putting plans in place to mitigate any negative effects on the sale of the business is a good start, and shows that you are thinking ahead. For example, making provision for dealing with potential increases in costs will help maintain the profitability and attractiveness of the business.
 
Looking at your labour force and whether anyone will be affected is also important, as losing key employees or significant numbers will impact the value of your business to a third party.
 
Reviewing and dealing with any trading contracts that might be affected by Brexit will be important for purchasers as they will want to make sure that trade continues  - certainly in the  short term.
 
Preparing for possible increases in VAT administration on leaving the EU for those businesses that trade with European suppliers and customers will also be key, but no details are known on this yet.
 
For vendors, trying to maintain the profitability and value of your business and putting plans in place for any issues in the face of the current uncertainty is key. Showing you are taking steps to mitigate the risks in a period of business uncertainty will help give a potential purchaser confidence that their investment is money well spent.
Want to know more?
Sarah Healey Pearce is a Director in our Corporate Finance and Business Advisory teams, regularly advising clients on transactions. To get in touch with her please call 0330 058 6559.
Email Sarah