Extracting value from your business…

Starting a business can be a lifetime’s dream; making it successful requires hard work and determination. Every owner leaves their business eventually, so why not take the steps to exit on your own terms and maximise value!

Planning:

It is never too early to consider exit planning; it is not a single event, but a tailored process and understanding it will help you maximise your financial return.

Tips:

Before you retire or sell your business, you should:

 improve profitability, current and forecast

 enhance your company image;

 nurture and tie-in long-term clients and suppliers;

 build a motivated team – make yourself dispensable; and

 reduce risk and uncertainty.

What is your business worth?

It is important to know your company’s value. There are several valuation methods, the most common of which is a multiple of maintainable profits - a trusted adviser can work out the most suitable for you. Multiples depend on risk. Factors to be considered include:

 company size;

 sustainability of competitive advantage;

 growth and profit trends;

 dependency on business owner;

 business disciplines and practices; and

 industry sector; market/economic environment.

Companies with blue chip clients and reputable brand name will attract higher multiples. Intangible benefits, e.g. intellectual property, attract a premium.

Exit taxes:

 when you sell your business Entrepreneurs’ Relief (ER) may be available, reducing the tax payable on your capital gain.

 if you qualify for ER, up to £10m of lifetime capital gains (per shareholder) will be taxed at a 10% rate, rather than 20% (for higher rate taxpayers).

 to qualify for ER, you must have owned the business for at least two years. If shares are being sold, the individual must have, (for at least two years):

• owned at least 5% of the ordinary share capital and voting rights;

• been an officer or employee of the company;

• been historically entitled to 5% of the company’s profits and assets OR be entitled to 5% of the proceeds on a sale.

ER is not always available, but advance planning may improve your position. How the sale is structured will also determine how much of your hardearned value is lost to the taxman.

We strongly recommend you take professional advice before making decisions on matters discussed

About us

Hazlewoods Corporate Finance team are experts in helping business owners achieve their goals. We are the South West’s number one corporate finance adviser (Experian M&A Review 2018) and can help you achieve your goals while ensuring that your lifestyle, income and security objectives are met.

“Hazlewoods assisted me with the disposal of my family business and I would heartily recommend them. From the beginning of the process, right through to the end, they were extremely professional, diligent and responsive to any matters that arose.”

Steve Roe

For more information on maximising the value of your business, contact Paul Fussell on 01242 680000 or email paul.fussell@hazlewoods.co.uk www.hazlewoods.co.uk

Great British Card Company bought out of receivership

The Gloucester-based Great British Card Company has been bought out of receivership by Swan Mill Group, the parent company of greetings card publisher Ling Design, uniting two of the UK’s largest independent greetings card publishers.

GBCC will continue to operate separately to Ling Design in sales, operations and customer services.

Swan Mill, which trades as Swantex, also owns the luxury gift packaging brand Penny Kennedy and will now have a group turnover of more than £70 million specialising in “ink on paper” products.

David Byk, CEO of Swan Mill, said: “This acquisition brings together two great UK companies which will open up huge possibilities for all the UK regional, national and charity customers, as well as our strong export channel.”

The Great British Card Company started life as Paper House in 1980 in a Cheltenham garage, and then in a warehouse in Northleach. The business grew organically and through a series of acquisitions during the late 1980s and the early 1990s.

In 2008, the company bought Medici Cards, followed by The Almanac Gallery in 2013.

It also licences out to personalised online greetings specialist Moonpig and Design Design, a card publisher in the United States.

In the last published accounts

GBCC’s revenues dropped by more than 5.5 per cent.