A roundup of ‘PM+M’s selling a business series: maximising shareholder value’ event – Thursday 11 November

The first event in PM+M’s selling a business series took place this morning, ‘Maximising shareholder value’. The virtual event was aimed at those who may be thinking about selling their business over the next few years but have concerns about what to expect. We were joined by a panel of experts who shared their knowledge, provided insights, and helped attendees understand more about preparing for sale.

Hosted by PM+M’s Neil Welsh, we welcomed panellists:

  • David Gorton – Partner, PM+M
  • Amin Kamaluddin – Strategy and growth consultant, SK Growth
  • Roger Phillips – Tax director, PM+M
  • James McIntyre – Financial planning director, PM+M

Following the opening introduction and welcome from Neil, David Gorton kicked off proceedings by providing an overview of a business sale, from reasons to exit, potential exit routes and valuations, through to the overall sales process from beginning to end.

A particular point to take away from David’s presentation was the timeframes highlighted during the sales process – selling a business is by no means quick! The various stages highlighted include exit planning (which can take a number of years), receiving and negotiating offers, agreeing heads of terms, due diligence and legal agreements through to completion – and it is only at the completion stage when you can finally celebrate!

Amin Kamaluddin went on to discuss how his role as a strategy and growth consultant can help to increase your business value.  To achieve maximum value, Amin discussed utilising a ‘value grid driver’. A tool which Amin uses to determine the attractiveness of a business, analysing the business’s EBITDA strength, management information, sector attractiveness, how diverse the product range is plus much more. By utilising this detail, recommendations can be given to determine what changes could be made to ensure the business achieves maximum value (if, and when, the owner decides to sell).

PM+M’s tax director, Roger Phillips, then took to the floor to discuss all things taxation in relation to a business sale. Roger focussed on a number of tax issues to consider when deciding to exit a business, including business asset disposal relief (BADR). Roger highlighted a key message in relation to the former Entrepreneurs’ Relief – in order to benefit, conditions must be met throughout the two-year period leading up to a sale. Therefore, if you are thinking about selling your business, it may be time to start moving shares around the family sooner rather than later.

Roger also discussed incentivising key management through the ‘Enterprise Management Incentive’ (EMI) scheme and the importance of pre-sale planning, especially if you are currently taking cash out of the business as an income. Lastly, Roger also drew attention to the option of selling to an Employee Ownership Trust – something which is gaining a lot of interest at the moment as this type of sale can be made without attracting any charge to capital gains tax (as long as certain conditions are met).

Our final panellist was James McIntyre, who discussed how PM+M’s financial planning team can advise on methods to maximise your wealth, before, during and after the sale of your business. By speaking to a financial planner, a better understanding can be obtained of how much the business will need to sell for in order to achieve the lifestyle you require.

James also discussed how a financial planner can help you to understand your investment options following a sale, discussing the risks and rewards as well as potential returns.

Neil brought the event to a close and highlighted how a business sale requires collaborative working between corporate finance, tax and financial planning teams in order to achieve maximum value when selling your business. It is essential that you have a good team of advisers around you to help you achieve more from your business sale.

If anyone would like to be introduced to members of the panel, included in the invite for the next event in the series or wish to speak to one of the PM+M team about our services, please get in touch by emailing enquiries@pmm.co.uk.

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