Business development · 18 April 2017

Selling a business post-Brexit how prices will be affected

Selling a business post-Brexit
Selling a business post-Brexit
Have you been thinking about selling a business, but holding fire to await the implications of Brexit? Here’s why selling a business post-Brexit may just be a great time to sell, after all.

If you own a small business but are looking to sell, you may have been mulling over how your price is likely to be affected by Brexit.

The UK has seen some very tumultuous times over the last few months, following the vote in June and the triggering of Article 50 a few weeks ago.

The pound has nosedived, bobbed back up and continued to remain in flux, and we are none the wiser about how our trading partnerships will look with Europe in years to come. In all the uncertainty, steering a small business has been more of a challenge than ever especially for those that are deeply involved with our European neighbours.

We caught up with former serial entrepreneur, now professional mentor, Philip de Lisle to find out how things might have changed, if at all, since the referendum.

Selling a business post-Brexit: The immediate aftermath

I suppose there was a very small hiatus around the referendum, and I think for people who were nearing retirement age one or two probably thought it was time to go, said de Lisle.

but the reality is, selling a business is not something that happens overnight. From the day you put a business up for sale, you’re looking at between six and 18 months, so actually you’ve still got to run the business in that time.

De Lisle is very positive about post-Brexit opportunities for businesses looking to sell, and doesnt believe the market has been unduly affected by the vote to leave the EU. However, he warned that it is a buyers? market? and always has been only around 15 per cent of businesses on the market in the UK actually sell.

For this reason, de Lisle said, it is important that business owners ensure they are exit ready, regardless of Brexit. This much, at least, has not changed.

? don’t just put your business on the market and expect somebody to come and take it off your hands. you’ve got to do some work, and the biggest, more important thing, is that the business has got to run without you, he explained.

if the business can’t run without you, the owner, then the new owner is not going to let you go anywhere. Youll be tied in for a certain period to make sure that the business performs as you say it’s going to perform.

The key to making your proposition attractive to a potential buyer is to build a strong management team and cultivate steady numbers. Any sudden movement or dips in profitability is going to be a warning sign to risk-averse investors.

Selling a business post-Brexit: The global playing field

Since the vote, one thing that has affected business the most is the changing strength of the pound. This has been a blessing for some and a curse for others.

For those business owners that export products, the pound being cheaper means their products are more competitively priced and therefore more attractive to foreign buyers. However, for those that import to the UK, their money is worth less than before and their costs have risen.

So how does this balancing act affect you if you are selling a business in the UK to a foreign investor?


 
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ABOUT THE EXPERT

Letitia Booty is a special projects journalist for Business Advice. She has a BA in English Literature from the University of East Anglia, and since graduating she has written for a variety of trade titles. Most recently, she was a reporter at SME magazine.

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