This presentation shows a simplified process to selling your business and the alternative routes you can use to move onto the next stage in your life. Through this transparent and coherent approach you could maximise the value and so keep more money in your back pocket.

1. Assynt Corporate Finance
Limited
Andrew Watkin FCA
20th January 2015
awatkin@assyntcf.co.uk
www.assyntcf.co.uk

2. Web site

3. Briefings

4. Briefings
• 7 top tips for writing effective Business Plans
• Cash is King
• Earn Outs
• How is cash created and absorbed in a business
• The Mysteries of Margins
• What is the right level of debt
• Why should I have a Financial Health check?
• UK Small businesses are failing to invoice for billions
• Handing on to the next generation
• Family Values – The options for “selling” your business
• What makes a successful MBO/MBI
• Launch of Crowdfunding App

5. Blogs

6. LinkedIn page

7. So what is corporate
finance?

8. It is not …

9. Neither is it…

10. In a nut shell, it’s about trust…

11. and money
You cannot do much in a business without money and to be blunt the more of it you have, the
more you can do and that’s where corporate finance can help with the transactions in the life of a
business…

12. So what are the types of
transaction…
Selling or disposing
of businesses
• You want to
maximise the
value you receive
at the time you
decide to sell
Buying businesses
• You want to
know what you
are buying
Raising Finance
• You want it to be
quick, simple and
cost effective

13. Which route will you take to sell or
dispose of your business
Passontofamilymembers
•Identify appropriate
roles
•Train for handover
•Consider deal
structure
•Tax planning Sellforacapitalsum
•Identify possible
purchasers
•Management team
•Trade Buyer
•Establish likely
interest in the
market
•Groom the
business to attract
highest value and
most interest
Windthebusinessup
•Establish likely costs

14. Selling businesses Stage 1
•Look at the areas to make the
business sellable
•Shareholdings
•Tax issues
•Contracts
•Do you have something to sell?
•Timing
•When you go
•Missing the buyers window
•Likely buyers
•Research the market
Plan your exit

15. Selling your business Stage 2
• Summary of your
business
• Prepare a flyer
• Research UK and
Overseas Market
• Mailshot the flyer
• Advertise on certain
business for sale web
sites
• Advertise on networks
Market
Research

16. Selling your business Stage 3
• Information Pack
• Distribution of the
Pack to potential
purchasers under
NDA/Confidentiality
Agreement
• Indicative offers
invited
• Offers collated and
report back
Compile a list of
potential
purchasers

17. Selling your business Stage 4
•Meetings with interested parties
•Negotiate to Heads of Agreement
Proceed to meetings &
negotiation

18. Due diligence you have to be ready again, again and again…

19. Completion… documents, documents, documents…

20. Some numbers*
• Average multiple being offered
– 4.1 times excluding earn out (UK and Ireland)
• Younger owners are more likely to receive an offer
– 39 or younger 16.15% receive an offer
– 60 or older 11.45 %
– Overall 11.75%
• But the multiple is lower for younger owners
– 39 or younger 3.37 times
– 60 or older 3.66 times
– Overall 3.66 times
• Most popular
– Estate Agencies, Rental leasing 18.8%
– Accommodation and Food 16.32%
– Transport and Warehousing 15.05%
– Average 11.76%
– Worst: Construction, 8.2% Wholesale 8.56% and Utilities 9.09%
• Industry average multiples
– Estate Agencies, Rental leasing 4.06 times
– Accommodation and Food 2.10 times
– Transport and Warehousing 3.63 times
– Average 3.66 times that’s across the network
– Worst :Construction 3.33 times, Wholesale 3.88 times and Utilities 5.00 times
* based upon research published by Sellablity Tracker Q2 2014

21. Best and worst businesses – the
effect on valuation
• Say, the best businesses: 5.0 times and the worst: 3.00 times
• So, if your (adjusted)profits are £100,000 the difference is
£200,000 in the price
• The point is timing – If you believe you’d get 3.00 now do you
risk leaving it and hoping to improve the business by making
an investment in products or services, CRM systems,
marketing, social media, training and so on so as to achieve a
higher multiple or take the lower multiple now…
• It’s your choice but I will do the best for you when you
decide…

22. So why work with me?
• Experience in selling and buying businesses that are not necessarily well
prepared
• Focus on the whole deal – it’s not just the price!
• Help you to make the offering as appealing as possible to potential
purchasers
• I care about the outcome but I am not conflicted by the need for it to
complete
• I can focus on one deal at a time

23. So, let me do the negotiations?
Why?
• Protect the principals
– Keep your integrity so as to avoid being backed
into a corner
• Argue the point on your behalf
– Without putting your views in the firing line
• Protect antagonism
– Avoid souring relations between principals

24. But – it’s about a matter of trust
and how to build that trust

25. Contact details
Website: www.assyntcf.co.uk
Email: awatkin@assyntcf.co.uk
Mobile: 07860 898452
Office Telephone: 01438 750555/ 01438 730981