The UK economy is on an upswing in 2017 and if you were planning on selling your business, now is a very good time. The market is currently right for sales and you should be able to reach the maximum potential price for your business in this more lucrative market. The economy is rising steadily and the UK is set to have the best economic growth in 2017. So why sell your business now?
Tax relief: There is currently a 10% capital gains tax payable when selling your business as opposed to the usual rates of around 18-28%, various relief’s can also reduce or defer capital gains tax. These include Entrepreneurs’ relief for individuals selling part or all of their business and Business Asset Roll-over relief, if you reinvest gains in other business assets. Alternatively, you may be exempt from capital gains tax if your gain was invested in shares under the Enterprise Investment or Seed Enterprise Investment Schemes. This means a big cost saving to you as the business owner when you sell. This situation may not always be in effect and this special tax relief may be removed in future, seeing an increase in fees once again.
Low interest rates: The Bank of England is currently holding the interest rate at a low of 0.50%, which makes finance a lot more affordable to people wishing to purchase a business. There are a lot more people who will now have access to higher amounts of finance and may be interested in buying a business like yours. The low interest rates also mean that people are able to spend more, improving consumer spending and showing better profits for businesses, showing an improvement across the board for most industries. Interest rates are unlikely to stay at this all-time low and it becomes more expensive for people to use financing, so purchasing will reduce and people will be willing to pay less for your business.
Better valuation: With more buyers having access to affordable finance, and a lot more buyers looking to buy a business, you may have a lot more buyers interested in your business, which means you are far more likely to reach your maximum sales price especially if your business falls in to the high demand category.
Location: You might be in a prime location or an area which may be ripe for expansion, with some corporations looking to purchase smaller businesses in good location as they look to expand, it is often more convenient and cheaper for them to buy an existing business that has been trading for several years. The low interest rates also means that these businesses now have greater access to funds in order to purchase smaller businesses to increase their portfolios.
The proof is in the pudding: If your business is thriving, and you have been in business for three years or more, you have shown that your business can stay strong even during tough times. The UK has been through a recession and a number of very difficult years for small and even larger businesses recently and having survived these hard times shows the tenaciousness of your business. For most buyers, this will be a good selling point, if they purchase your business, they will still be able to keep trading even if there is a downward trend again in the future.
If you are looking at retiring or perhaps going in a new direction, or any other reason you might want to sell your business, now is the best time to sell, so get in touch and find out more about our no risk approach to selling a business.