Should I sell my business now or later?

Published 7 October 2020

I wrote in late July about whether now might the time to consider selling your business, in the context of expected Capital Gains Tax reforms. Please see the link at the foot of this post if you haven't read it before.

I proposed that if you are thinking of a sale in the next 12-18 months, then it might be worth considering accelerating those plans to help reduce tax liabilities on the sale proceeds. That timetable has been pushed back with the cancellation of the Autumn Budget: postponed due to COVID until, probably, March or April next year. That does mean there is now ample time to complete a deal, and we have seen a renewed interest from business owners.

Last month I ran a seminar on this matter, which was well attended: one of the usual problems with a seminar of this nature is that business owners worry about attending as they like to keep confidential the fact that they may be considering a sale, let customers or staff hear about it and get concerned.

However, the online version took that worry away. We will run repeats for the rest of the year, but one-to-one (online or face-to-face), so that attendees have the opportunity to ask questions that are specific to their own business and circumstances.

I suggest three other reasons that my suggest that now is a good time to sell:

1. The availability of cheap debt to fund acquisitions: The costs of bank borrowing is at historically low levels, and many companies have already borrowed cheaply to give liquidity for deals;
2. Time to consider: CEO's will have had more time to reflect when working from home - thinking about the direction of their companies and for some, they will have decided that expansion with expansion would be a good strategy; and,
3. Private Equity: Firms are awash with cash ready to invest. I have read of estimates of as much as £1.5trn available.

The financial press is full of M&A deals of late, which supports my view.

The only caveat I have is business valuations: Therefore, the seminar that I mentioned covers how businesses are valued and the drivers of business valuation…. And as the seminars are now one-to-one we will take the time to give you a pretty good feel for what your business is worth and what your next steps could be.

Capital Gains Tax Reform: https://www.cbslgroup.com/blog/capital-gains-tax-reform