Exit Strategy Planning

Plan your Exit Strategy

Irrespective of your business, complexity of your exit or the circumstances surrounding your decision to depart, you will want to exit having achieved maximum sales value, tax efficiency, financial security and legal protection. ESP is dedicated to success and has the expertise to ensure that your plans are watertight and that the process is completed without delay, disruption or complication. We will tailor a strategy to satisfy both your corporate and personal objectives and that delivers:-

 

The right buyer
you only sell once so obtaining maximum sale price is essential

 

Proactive tax planning
to guide you through the taxation maze, ensuring only minimum tax liability is incurred

 

Specialist & comprehensive financial advice
to ensure your pre-exit plans are sound and post-exit strategy achieves personal objectives in the best way possible

 

A structured legal framework and advice
preparation and completion of your contracts of sale

 

Unique, professional solutions
Whilst we understand that no two situations are the same, an approach similar to the one below would be adopted by our business sales advisers to suit your individual needs:-

 

  • initial meeting to understand business and personal objectives
  • a review of the business
  • the preparation of a comprehensive strategic planning and marketing document
  • thorough research into potential buyers (from Europe and the USA)
  • marketing of the business
  • an assessment of the indicative bids received
  • the management of the negotiation process on your behalf
  • finally, ensuring that you ultimately receive the funds due to you
  • Pre-sale tax planning is highly beneficial, even before you totally commit to selling, as it will provide opportunities to eliminate, or at least, defer taxes. It will also help to protect your achievements to date and guarantee realisation of objectives

 

Tax legislation was introduced to encourage the development of owner managed businesses but there are still complex pitfalls that you need to be protected from. Our thorough interpretation and understanding of the tax rules and regulations ensures that corporate taxes for your company, capital gains tax for the owners and all other hidden taxes can be mitigated. Each sale transaction is different and must be considered in its tax context, whilst appreciating the vendors overall objectives. Our taxation advisers will offer a complete tax solution to reduce the overall tax burden and increase the value of the sale to the vendor.

 

Capital tax regimes are fundamental to your business exit and these can be regarded as voluntary in that successful planning will maximise reliefs and exemptions that you are entitled to. Following your exit, we will also protect the value derived from your business and overall wealth by implementing efficient tax strategies to ensure optimum value is retained by you and your family.

 

The decision to sell your business is huge and needs a great deal of thought and planning as it will probably be the greatest decision of your business life. There are no two identical sale situations as the characteristics of clients’ businesses vary even when in an identical industry. What is common however is that all businesses ESP sell are valued at over £1m and owners will always have their own personal agendas and financial goals.

 

Two general rules can be applied to most business sales though:-

 

The buyer that is going to pay the highest price is not normally the most obvious one, hence the importance of thorough research an unsolicited bid will not usually result in the best price but, from experience, some form of competitive bidding will.

 

The selling process is time consuming and can be a major distraction which, if managed ineffectively, could result in an aborted sale or deterioration in your business’ performance. By appointing ESP, our business sales specialists take the strain so you can continue to focus on guaranteeing continuity within your business. We make sure that we really understand your business as selling it can be an emotive process and ultimately there has to be the right personal chemistry between you, the seller, and us as advisers.

 

The legalities involved in selling businesses are vast and often confusing. ESP law partners have the experience to ensure that you are protected throughout the sale process and in a secure position upon completion.

 

Consultation

Our legal partners should be instructed early to make sure:-

 

  • you are in a good position to sell the company
  • any deal has a clear strategy and is structured in an efficient manner
  • all potential issues are identified

 

Agreement of Terms

When a buyer has been identified, we will need to agree Terms of Sale and help to finalise the Heads of Agreement which set out the main aspects of the deal.

 

Exit Strategy Planning – Steps to Completion

The buyer will conduct a ‘Due Diligence’ investigation. Our legal partners will manage this by liaising closely with you and other parties to negotiate the documents necessary for the sale. The main document is the sale and purchase Agreement, setting out the terms of the deal, including restrictions to be placed on your business activities after completion and your assurance (warranties) on the state of your business. When the documents have been agreed, our legal partner will attend the completion meeting with you and manage the formal completion process.

 

During your business life you probably only made crucial decisions after seeking professional advice and having armed yourself with sufficient evidence to support the route taken. This should not change when planning the personal financial aspect of your departure.

 

We can advise in the essential ingredients of your post-exit plan such as:-

 

  • how to meet continued income requirements
  • the options available with accumulated pension arrangements
  • protecting your capital from the effects of taxation
  • investing capital for efficient growth and income
  • structuring your estate efficiently to minimise the impact of inheritance tax
  • the role trusts may play.

 

Before discussing suitable financial options, we will ensure that a clearly defined plan is in place and fully understand what is important to you in terms of income, savings, services and investment. Once we have established a clear focus and financial path, our team of financial experts will help you implement this with unprecedented advice and a tailor-made portfolio of financial planning techniques designed to meet your needs precisely. To ensure that everything remains on track, this will also be reviewed for you every year following your exit.

Building your business to the level of success it is now no doubt needed focus, determination, discipline and sheer hard work. ESP recognise these qualities as they are the foundations on which our business is also built.

 

Playing a pivotal role within ESP are our professional advisers and partners. All have been hand-picked for their exemplary skills, professional achievement, positive attitude and interpersonal ability. We believe they are the very best in the industry. This is an essential credential and a fact that should not be underestimated as poor professional advice can be very costly and may even lead to an aborted sale – clearly an experience to be avoided.

 

ESP truly understand the meaning of excellent service and is committed to delivering this to each and every client. We are dedicated to achieving the highest price possible for your business and determined to ensure that our approach is both dynamic and appropriate. We want your experience with ESP to be a positive and memorable one which is difficult to find elsewhere.

 

Here is what one of our clients recently wrote about his experience with us

“I would like to place on record that the Exit Strategy Planning Team delivered everything that I was promised and indeed, much more. I secured more money than I was ever anticipating for the sale of my business due to the expertise of the ESP Corporate Sales Specialist. I paid much less tax as a result of ESP tax consultancy advice. The ESP vetted lawyers and financial advisory services were first rate.

If I ever wished to sell another business, I would, without any hesitation, use the services of Exit Strategy Planning”

 

Andy Anderson (ex Managing Director)

 

Exit Strategy Planning – Case Studies

Here are a selection of case studies which are typical of the transactions we handle.

 

Sale of Manufacturing Business to a Management Buy-in Team

The owner of this contract electronic manufacturing business was prepared to sell for £1.4 million. Through our extensive ESP network, we managed to secure a management buy-in team and the eventual sale price was well in excess of £2 million.

 

Key deal points

We identified the buyer through our own internal network. The buyer wasn’t known to our client and wouldn’t have been on any database.

 

Our client:-

  • secured a premium price, an uplift of more than 50% above his expectations.
  • only had to stay on for a 3-month consultancy period, with the final month working only a day a week.
  • has the cash and is free from the business.

 

Sale of a Speciality Service Business to a Management Buy-in Team

The business provided services to a niche area of the building construction sector and after many years of static performance had, during the two years prior to sale, shown a dramatic improvement in trading performance. Our client agreed that it would be best to optimise the sale consideration whilst trading was continuing to show growth.

 

Key deal points

We identified the buyer through our own internal network. The buyer wasn’t known to our client and wouldn’t have been on any database.

 

Our client:-

  • secured a premium price, an uplift of more than 25% above his expectations.
  • received more than £5 million cash upon completion.
  • has a continuing interest in 20% of the business and will also secure additional cash consideration of more than £3 million.
  • is no longer enduring the stress of managing the business.
  • although still involved in the business, has active new shareholding Directors that enable our client to have more than 3 months a year guaranteed holidays.

 

Sale of Business to Trade Buyer

The seller of this manufacturing business in the Midlands was happy with his contract but we noticed an opportunity to secure additional consideration. During the final negotiations with the buyers, we achieved a favourable change in the deal structure. This enabled us to fully cover the entire transaction fee and that of the lawyers. The eventual sale price was well in excess of £2 million.

 

Key deal points

The buyer was a trade buyer that paid in cash on completion.

 

Our client:-

  • secured last minute additional consideration through our negotiation expertise. This enabled the client, within a matter of minutes, to earn enough additional funds to more than pay for all of their costs.
  • has had all the cash from the date of completion and is free from the pressures of running a business.

 

To find out how to get the most for your business contact ESP@cardiffifa.com

Exit Strategy Planning is not regulated by the Financial Conduct Authority.