Many people when thinking of retirement decide to operate their business at a reduced level before selling it. This is not something we would recommend if you want to get the best price for your business. When valuing a business the valuers and lenders will look at the last three years of trading accounts and if turnover has been reducing it represents a business in decline rather than a viable concern. Valuers and lenders will consider the bricks and mortar value of the concern and then add on the value of the business to come to a market valuation.
If you can continue to trade your business to its potential you will achieve the best possible valuation for it which in turn gives you the best chance of achieving your guide price. We have had several cases where clients have been wanting to buy a concern but have had difficulty in raising the finance due to the trading figures, lenders are aware that a lot of people deliberately trade under the VAT threshold and will take this into consideration when looking at borderline deals.
If you are thinking of selling your business please call us to discuss how we can help you. We can in some instances arrange a line of credit for your potential purchasers.