Frequently asked questions
Here are answers to the most frequent questions we get asked. If there is any question you can't see an answer to please contact us and we'll be delighted to talk with you and address any queries you might have.
How much is my business worth?
It's the first question we'd ask. A well known rule of thumb is ’as much as a willing buyer is prepared to pay for and a willing seller is prepared to sell for.’ That said, business value can be determined by many factors. These include cash flow, sustainable profit, asset value, financial history, location, competition, customer base, ongoing management and the economy
...when the game is finally over, the only value of a business is the price someone will pay for it. Michael Gerber, author of The E-Myth
What you think your business is worth makes little difference, and potential buyers will place little credibility in a value arrived at by your accountant or bank manager. Only the marketplace can decide its true value. Incorrect value and unrealistic vendor expectations are the main reason for the failure of most business sales. A buyer will simply dismiss your business if it is not priced reasonably.
If you want to know what's happening in the market, ask the market. Japanese Proverb
At Lucas & Weston we are dedicated to selling businesses every day. As a result we are experts at valuing businesses on the basis of what the market is likely to pay, which stems from our own extensive experience. Just give us a call or send an e-mail for a non-obligatory, free and confidential appraisal or discussion.
Back to top
When is the best time to sell my business?
Usually the best time to sell your business is when you don't have to or when it is doing well. The decision is not one which should be taken lightly, and you should groom your business and plan well in advance. Haphazardly going on the market can seriously limit your chances of sales success and the amount of money you receive. It is possible to sell most businesses if prepared, structured and priced correctly.
Back to to
Why use a business broker?
Some business owners feel that they can sell their business themselves. Who knows the business better than they do? Place an advert in the paper, get your accountant to write a letter to your competitors, and wait for the phone to ring.
Meanwhile, what happens when the phone doesn't ring? If it does, could it be a competitor or a tyre-kicker just looking to see what is for sale and for how much? If you hear from someone who appears interested, they may visit your business, ask all kinds of questions, make your staff nervous, get you to prepare lots of time consuming paperwork, leave and disappear - never to be seen again. What happened to confidentiality, qualifying the prospects and finding the right buyer? All of this takes time, great effort, skill and professional processes.
A good broker should be able to find buyers beyond the obvious - buyers you couldn't find on your own. There are five types of buyer; your broker will advise you about the ones to avoid?
The broker, with a database of qualified buyers, will be able to produce all the documentation necessary to show your business in its best light. They should be able to add value, maximising the sale price so that the benefits far outweigh any fees involved.
Selling a business is a complex and time-consuming process. It is very easy to underestimate the process and think you can do it all. You wouldn’t be the first or last to take your eye off the ball while trying to sell, letting your business slide - weakening your sales proposition. You can even make your business unsaleable. Don’t make this mistake and live to regret it.
A buyer will automatically assume a position of advantage if they see you have chosen not to take professional help, especially if they equip themselves with an army of experts - beware.
Using a broker means that you will benefit from an experienced professional who understands what it takes to make a deal happen – controlling the process from start to completion. Click here for some tips on how to choose a broker.
Not convinced? One of the best reasons to use a broker is to act as a buffer between you and the purchaser. There will certainly be times when you’ll want to adopt a tough negotiating position. A broker makes this possible without antagonising the buyer. Remember, you might have to work with a new owner during a handover.
If you need only one reason, this is it. Sellers receive a better price for their business when they work with an experienced professional broker.
Back to top
How do you choose a broker?
We are constantly amazed at the lack of care and attention which goes into choosing a broker. Perhaps this is why so many business sales fail? There are a few fundamental questions you should get satisfactory answers to prior to instructing a broker to sell your business. Why? If you don’t, you can waste thousands of pounds in fees and countless hours preparing sensitive information. You will become frustrated, disappointed and annoyed dealing with time wasters and tyre kickers. Click here for a guide to appointing a broker.
Back to top
What are the tax implications of selling?
This depends if you are a sole trader, partnership or limited company. Some form of tax is inevitable. It is vital you get advice on the tax regime applicable to your circumstances. The question is not really how much your business will sell for, but how much of it you can keep. The right tax advice can have a big impact on how your deal is structured and ultimately how much you have to pay the Chancellor of the Exchequer.
Currently, within the UK, the tax regime on company sales is incredibly favourable to the seller – with capital gains tax as low as 10 per cent. This is one of the most advantageous in the EU. How long this lasts while we have the present government is anyone's guess. We think it will be changed within the next eighteen months. From a tax point of view, there may never be a better time than now to sell your business.
Back to top
How long does it take to sell?
This depends on the market conditions and what is for sale. However, our average business sale takes between five to eight months from start to finish, although you should allow a full year. In most cases we are talking to the eventual purchaser within the first three months.
Back to top
Is Lucas & Weston a franchise?
No.
Back to top
Can I come and see you?
First we will discuss your requirements over the phone. Then, if we think we can help you can visit us for a free, confidential and non-obligatory appraisal or discussion at our offices in Bath. Just give us a call for an appointment.
Back to top
What information will I have to provide?
Initially we would ask for your latest set of accounts together with any business plan or company literature. We would then contact you, in confidence, to arrange a non-obligatory, free meeting at which we will sit down with you and assess your business's saleability and answer any questions you might have. Please note this can be done out of hours and off site in order to maintain confidentiality.
To find out more, why not just call or e-mail us and arrange a free, confidential and non-obligatory meeting at our offices here in Bath?
Back to top
Should my accountant sell the business for me?
This is where many people get things wrong. The first steps are neither legal nor accountancy based. This is one of the principle reasons many sales never get off the ground.
Would you let your accountant or lawyer sell your products or services? No, of course not. You need the right tool for the right job. Selling your business is first and foremost a SALES and MARKETING exercise. Get this wrong and you could easily dent the value you ultimately receive.
A business broker - who excels in Sales and Marketing, knows the marketplace and has experience of completing a wide range of transactions - should be the first person you contact. They are also the right professional for your introduction to the marketplace.
A good broker can make a dramatic difference in not only how your business is sold but also how much you get.
WHO you sell with can SERIOUSLY DAMAGE YOUR WEALTH!
Back to top
What kind of businesses do you sell?
We sell sole traders, partnerships, limited companies and public limited companies (PLCs) in most industrial, manufacturing, leisure and service sectors. However, we only seek instructions from profitable going concerns. We don't get involved in turnarounds or liquidations.
We are selective and cautious about the engagements we undertake. We prefer to handle a smaller number of high-quality transactions to having large lists of overvalued, less desirable ones.
Back to top
What size businesses do you sell?
Our niche is companies worth between £250,000 to £10million.
Ideally you should have net profits in excess of £100,000.
Back to top
Do you offer advice to buyers?
As an independent company acting on behalf of our clients, we offer limited advice to purchasers. However, we are happy to point them in the right direction to banks and lawyers who might be able to assist them. Advice for buyers – click here
Back to top
Can you arrange finance?
Naturally, we have excellent contacts with nearly all the major institutional finance houses and independent brokers. We are happy to arrange contacts for a purchaser if necessary.
Back to top
How do you keep the sale of my business confidential?
We go to great lengths to safeguard the confidentiality of our clients. We have a tried-and-tested process of maintaining confidentiality. We vet and pre-qualify all our purchasers before making signed confidentiality undertakings / non-disclosure agreements. No confidential details of any business are ever given to potential purchasers without a client’s consent.
Back to top
How will I know what's going on?
Working closely with you, we regularly update you at every stage of the process. No details about your business are ever given out without your express permission. You control who we talk to and what we tell them. We are accountable to you at every step of the way.
Back to top
How are meetings held and managed?
Lucas & Weston organise and aim to attend all viewing meetings, which can be held off site, at our offices or a neutral location and outside usual office hours if necessary. Our job is to look after your best interests, guiding you through every step of the sales process and make sure you get best value for your business.
Back to top
OK, what's so great about you? Why should I use Lucas & Weston
There are lots of average, run-of-the-mill brokers around. Ask yourself the following questions. Are you just a number? Do you want the best possible representation? Do you really want to close a deal? Do you want an experienced guiding hand? Do you want things explained to you in plain English? Do you want to be treated honestly and professionally? Click here to see some of our deals signed, sealed and delivered.
Click here learn more about the way we'll get YOU a result.
Back to top
What are your fees?
We agree with you in writing all our fees prior to engagement. Our fees are predominantly contingent - in other words, we don't get paid until we produce a result for you. We are remunerated on a percentage of the final sale price. Our fees are fully inclusive and we don't have any hidden extras.
Back to top
How do you find me a buyer?
With every new instruction, we do extensive background research to learn who has the financial capability, the appetite, and the best interests for match with our client. Most of our clients are positively surprised with the levels of serious interest and where the interest comes from. From experience we have developed proven cutting-edge marketing initiatives which deliver real results. Give us a call or send us an e-mail if you would like to find out how our unique approach gets the job done.
Back to top
Who will handle the sale for me?
All our instructions are director led. This insures that you have an experienced professional guiding you through at every step of the process - not a student or junior cutting their teeth on your business. All our directors have personal experience of managing business sales and delivering results. We have started, built, run, managed, bought and sold several of our own businesses. We are in the unique position of knowing exactly what issues and concerns you might have because we've had to confront them too.
Back to top
How much time will I have to put into the process?
This depends on how seriously you want to get a result. You will have to prepare some paperwork. If you are well organised this shouldn’t be a problem. We handle virtually all of the time-consuming or potentially intrusive elements of the selling process on your behalf. Client owners can continue to run the company without disruption or distraction. Our pre-qualification purchaser-screening process avoids tyre kickers, nosey competitors and time vampires, which reduces both stress to the owner and tension for staff members. Once a deal is agreed you will have to spend some time working alongside your solicitor. Again the more organised you are in advance, the easier it is.
Back to top
What about solicitors?
A solicitor’s job is to draw up the definitive sale and purchase contract once a deal is agreed. It is absolutely vital that you work with a solicitor whose main field of expertise is corporate law - principally the buying and selling of businesses. It can be a massive false economy to use a family friend or your wife’s brother’s friend’s sister’s uncle to help. Choosing the wrong solicitor can cost you time and a lot of money and untold amounts of stress. Solicitors can be real deal killers. Make sure you pick a winner. We are happy to recommend a panel of solicitors we have worked with who have a proven pedigree in delivering results.
Back to top
What do I do now?
Get started. Just contact us to arrange a confidential, non-obligatory and free meeting where we can discuss your individual requirements - write, fax, e-mail or call us.
Back to top
|
