With the uncertainty caused by the Covid-19 pandemic, rising costs and more demanding customers, many business owners will be looking for a way out. Industry veteran Neal Harper, who has launched the Sustainium Group to acquire window companies, discusses why the time could be right to sell your business, the barriers that notoriously scupper a deal – and how the Sustainium Group will make any sale as straightforward as possible.
They say there’s no time like the present. That could not be truer for business owners who have been toying with the idea of selling up or retiring into the sunset.
If major uncertainly over the last few years, from the 2016 Referendum to Brexit, put a strain on businesses, the coronavirus pandemic will have been the ‘final straw’ for many business owners.
And with Chancellor Rishi Sunak’s review of Capital Gains Tax (CGT) expected to hit business owners where it hurts on the proceeds of any sale, it is looking increasingly like the time to sell is now.
Getting out now
The most important consideration for a business owner is their own personal plans and timescale. After years of stress and worry many owners wish to step-off the wheel, enjoy more family time or do other things.
But, with the unprecedented challenge placed on businesses over the last four months, the time to exit will be in the forefront of many minds.
Some firms have had a surprise upturn in work, but the reality is it is harder than ever to run a business and maintain margins, with rising costs and more demanding customers, while red tape and onerous regulations are adding fuel to the fire.
And while currently you would pay 10% tax on the first £1m of sale proceeds, with the balance being taxed at 20%, that CGT rate is expected to increase to the top rates of income tax of 40%-45%, which would be a disaster for most business owners.
Why should you work all those years and often decades to give such a massive share of your life’s work to the taxman? If there was a reason for you to bring forward the sale of business then this is it.
What’s holding you back?
Over the years I’ve met many owners of window companies who want to sell or retire, but domestic double glazing companies are notoriously difficult to sell.
They invariably have huge liabilities which any new owner will have to take on, while most are completely dependent on fresh leads which means they are inherently high risk.
Business Brokers also prevent deals from happening because they mislead business owners on the valuation of the business, setting expectations that will never be met.
Their contract usually means they may be due a big commission fee if the business is ever sold – even if it isn’t them that sells it.
The perfect solution
Our aim at the Sustainium Group is to acquire local home improvement companies where we can build upon their established reputation and invest in their future and make the whole process as straightforward as possible.
We acquire businesses that have a good reputation locally with annual turnover between £750,000-£10million and at least three years trading history. We purchase 100% of the shares and the business will continue to operate under its own name. We also aim to retain the existing staff, while owners can often be retained on a consultancy basis or even in a key role within the business by agreement.
Our management team have decades of experience in the home improvement industry and have a hands-on approach, ensuring each business we acquire will continue to thrive with the passion and commitment that the original owners had.
So, instead of wasting time with business brokers, time-wasters with big ideas but no follow-through, and management buy-outs that never materialise, we have the people, finance, and partners in place to move quickly and decisively.
The Sustainium Group will initially be operating throughout the Midlands and the M5/M4/M40 triangle. The first step is a confidential and no-obligation conversation. For more information visit www.sustainium.co.uk or contact email@example.com.