Deciding to sell your business is a pivotal moment, combining financial considerations with long-term legacy planning. While recent tax changes might influence timing, achieving the best outcome requires strategic preparation and patience rather than a rushed exit.
Key Budget Updates and Their Impact
The UK’s recent budget introduced changes to Business Asset Disposal Relief (BADR), previously Entrepreneurs' Relief, that raise the Capital Gains Tax (CGT) rate for business sales:
From 10% to 14% in 2025.
Increasing further to 18% in 2026.
Although higher tax rates may encourage a quick sale to save costs, poorly prepared exits often fail to maximise value, negating any short-term tax savings.
Why Strategic Preparation is Essential
1. The Process Takes Time
Selling a business typically spans 6 to 18 months or more, depending on complexity, buyer interest, and market dynamics. Rushing often leads to undervalued deals or inadequate due diligence.
2. Boosting Business Value
Time invested in improving your business can yield significant returns:
Build recurring revenue or long-term contracts.
Strengthen your management team to increase buyer confidence.
These steps enhance your valuation and appeal to buyers.
3. Market Conditions Matter
Aligning your sale with favourable market trends can significantly offset tax increases. Consider:
Sector consolidation or growth.
Active interest from strategic buyers or private equity.
Timing your sale for peak demand often leads to better offers.
4. Finding the Right Buyer
The right buyer ensures your legacy and business goals are preserved. By vetting buyers thoroughly, you avoid undervalued offers and can negotiate favourable terms like minority stakes or structured payouts.
Why Patience Pays Off
Strategic patience allows for:
Higher Valuations: Buyers pay premiums for well-prepared businesses.
Stronger Negotiation Positions: You can secure better terms when not rushed.
Smooth Transitions: Carefully planned sales leave your business in capable hands.
How to Start Preparing
Whether selling now or in the future, preparation is key:
Get a Valuation: Assess your business’s current market value.
Strengthen Operations: Address weaknesses and boost recurring income.
Define Your Goals: Clarify your financial and personal priorities.
Monitor Trends: Stay informed about market conditions and buyer demand.
Partner with Vexus for a Seamless Transition
Selling a business is a journey requiring expert guidance. At Vexus, we specialise in helping entrepreneurs prepare for and execute successful exits. From maximising value to finding the perfect buyer, we ensure your business exit matches your vision and long-term goals.
Contact us today for a confidential consultation and begin planning your exit with confidence.
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