How Business Advisers Can Guide Clients on Strategic Exits
For business advisers, helping clients navigate the decision to sell their business is one of the most critical services you can offer. Selling a business involves more than just timing—it requires strategic preparation to maximise value and achieve both financial and legacy goals. With recent changes to tax policy, your role in guiding clients has become even more vital.
Key Tax Updates Impacting Business Sales
The UK’s recent budget has introduced changes to Business Asset Disposal Relief (BADR), formerly Entrepreneurs' Relief, with significant implications for Capital Gains Tax (CGT):
2025: CGT rates on qualifying business sales will rise from 10% to 14%.
2026: Rates increase further to 18%.
These changes may prompt some business owners to rush into sales to minimise tax burdens. However, hasty exits often result in undervalued deals and missed opportunities. Advisers must help clients balance tax efficiency with maximising overall business value.
Why Advisers Should Emphasise Preparation
1. Selling Takes Time
The process of selling a business often spans 6 to 18 months or longer. Factors like the complexity of the business, buyer interest, and market conditions can extend timelines. Rushed deals risk poor valuation, overlooked issues during due diligence, and unfavourable terms. Advisers should stress the importance of starting early.
2. Improving Business Value
Advisers can guide clients to focus on:
Recurring Revenue Streams: Buyers favour businesses with predictable income sources.
Strong Management Teams: A capable team that can operate independently adds value and reassures buyers.
Encourage clients to address weaknesses, streamline operations, and enhance financial reporting—all of which make the business more appealing.
3. Market Dynamics
Help clients align their sale with market trends, such as industry growth or consolidation, to increase demand. Strategic timing based on:
Sector Opportunities: Is there a trend of acquisitions in the client’s industry?
Economic Cycles: Selling during an economic upswing can lead to higher valuations.
Advisers should monitor these factors and provide timely recommendations.
4. Finding the Right Buyer
Identifying a buyer who aligns with the client’s financial and legacy goals is crucial. A thoughtful process allows:
Negotiation of favourable terms, such as retaining a stake or structuring payouts.
Mitigation of risk from mismatched buyers who undervalue the business.
Patience Leads to Better Outcomes
Advisers play a critical role in emphasising the benefits of patience, including:
Higher Valuations: Proper preparation and strategic timing can significantly boost sale prices.
Stronger Negotiations: Clients who aren’t pressured by time constraints have greater leverage.
Smooth Transitions: A well-thought-out plan ensures that the business is left in capable hands, preserving its legacy.
How Advisers Can Help Clients Prepare
Valuation Services: Ensure your client knows their business’s current market value.
Operational Strengthening: Work with clients to improve recurring revenue and reduce dependencies on the owner.
Strategic Planning: Develop a roadmap for achieving sale readiness, including financial, operational, and market-position improvements.
Market Monitoring: Stay ahead of trends in your client’s industry to recommend the optimal time for a sale.
Partner with Vexus
At Vexus, we collaborate with business advisers to deliver seamless transitions for their clients. From preparing businesses for sale to identifying the right buyers, we ensure that every aspect of the process is handled professionally and strategically.
Contact us today to discuss how we can work together to provide your clients with the best possible exit outcomes.
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