Simon Daniels, Sales Director at KBS Corporate
It may seem a little early to be thinking about New Year’s resolutions, but for business owners it is never too soon to consider what the year ahead may hold.
Here, Simon Daniels, Corporate Sales Director at KBS, explains what businesses should do next when companies are preparing to sell.
Do you have plans to grow your company throughout 2024? Or are you unsure about the macro-economic climate given it is practically certain to be a General Election year and there could be a change of government?
If there is any doubt in your mind about whether you see yourself running a profitable business 12 months from now, you could ring in the new year pledging to achieve a sale of your company that ticks all boxes for everyone directly or indirectly involved.
Despite inflation having surged in the UK over the past two years and the resultant rise in interest rates, the business sales market has remained buoyant – certainly from our perspective at KBS Corporate.
We achieved a record-breaking year in 2022-23 that firmly cemented our status as the UK’s No 1 business sales adviser in the rankings produced by the leading M&A statistical bureaus.
And more of the same is expected in 2024. With inflation easing, interest rates plateauing and the economy stabilising, this could be the ideal year to action the sale of your business – especially if the General Election is held in the autumn or, as it was in 2019, in December.
There is capital out there and we know the acquirers who are looking to invest, so a boom year may well be on the cards.
In which sectors will there be most business sales activity?
We continue to see strong levels of interest in companies across all industries, although inevitably spikes do occur in specific types of business – with commercial building services, green energy infrastructure and software-as-a-service having been particularly resilient in 2023.
Companies with impressive sustainability records are sure to remain in high demand as acquirers and investors strive to fulfil their environmental, social and corporate governance (ESG) commitments by acquiring firms that are regularly hitting targets in that area.
While it may not be happening as quickly as some climate activists would prefer, the increase in the number of electric vehicles on the road is driving demand for more charging points – and, on the business sales landscape, the companies that install them.
For example, during 2023 we advised on the transaction that brought sizeable private equity investment into Project Better Energy, a Burton-upon-Trent based solar and renewable energy service provider specialising in electric vehicle charging infrastructure and smart management systems, as well as commercial solar systems and battery storage.
Similarly, we have overseen numerous deals for firms which score top marks for sustainability in building design regarding lighting, energy and ventilation systems.
Companies at the other end of that scale have been approaching us to market their opportunity because the rising cost of materials has generated more challenging financial conditions for those in the supply chain.
This has resulted in sustained high levels of interest and activity at all levels not only in the energy, electrical and construction industries but across a wide range of sectors, from trade, private equity and overseas investors.
Thinking of selling your business in 2024? What to do next…
Firstly, decide on your ultimate objective. How do you envision your future lifestyle? Is your aim to retire, to relocate or to embark on a new business venture that may be tempting you?
Whether it is any of those aims, or even something less conventional, you will need the capital from the sale of your company to turn it into reality – which therefore needs to be front and centre when establishing an acceptable valuation for your business.
Then it is all about preparation. From a financial perspective, minimise debts, ensure your management accounts are up to date and the balance sheet presents the healthiest possible picture.
Contracts, licences and all other regulatory and compliance matters must be addressed. Be familiar with the tax implications of the sale, of how staff will be impacted in relation to their contracts and benefits and make sure you have clarity about your company’s structure.
And, of course, if you have physical assets such as premises or vehicles, they have to look the part – ready to pass the inspection tests of potential buyers.
Just as importantly, keep it quiet. The wrong people knowing a business sales process is under way can compromise your position with employees, customers, suppliers and competitors – so this is one New Year’s resolution you may just want to keep under your hat.
If you are to share it, do so with a leading business sales adviser. KBS Corporate has been helping company owners for a quarter of a century by providing an award-winning, tailored service that encompasses every stage of the sale process, with confidentiality assured throughout.
We start by listening to your aims and then implementing a bespoke service for your individual needs. This incorporates market-leading presentation of your opportunity, exceptional buyer identification, non-disclosure agreements for interested parties to protect confidentiality, and access to legal and tax experts who work alongside an experienced transaction team in providing full project delivery.
Simon Daniels is renowned for his experience and knowledge within the business sales marketplace. He has almost 20 years’ experience in developing creative sale strategies for shareholders to achieve their exit objectives.
