Archive for the ‘Business News’ Category

Government proposes changes to Entrepreneurs Relief

Tuesday, March 20th, 2018

The government is close to making changes to Entrepreneurs Relief that could save you a fortune when selling your business.

As it stands, if an entrepreneur’s shareholding falls below 5 percent after they issue new shares in their business, they are unable to avail themselves of Entrepreneurs Relief. This has long been a bugbear of hundreds of successful people who have felt they are being penalised for their business’s success.

Now, alongside the Spring Statement, the government has released a consultation paper outlining plans to right this wrong.

Entrepreneurs currently pay a special capital gain tax rate of just 10 percent when they sell shares in their business. However, this doesn’t apply if their equity falls below 5 percent after fundraising and issuing new shares.

The government proposes that individuals be allowed to elect to be treated as having disposed of and reacquired their shares at the then-market value. They should then be allowed to defer the taxation of this gain until their shares are actually sold.

The consultation paper, snappily entitled: ‘Financing growth in innovative firms: allowing Entrepreneurs’ Relief on gains before dilution’ argues that the changes are intended to prevent business owners from being disincentivised from seeking external financing for their business.

The government explains “ER was introduced to incentivise and reward entrepreneurs who, with significant initiative and risk, play a key role in building and growing a business.” It says that, in some circumstances, the loss of the incentive could actually result in an entrepreneur opting against growing his or her company.

“Such an outcome conflicts with the intended purpose of ER, and the government therefore believes it is right to act now to remove this barrier in a fair and proportionate way,” the government added.

It’s fair to say that the consultation paper has been welcomed by the entrepreneurial community, although some have argued that a consultation wasn’t even necessary as the policy isn’t likely to attract much criticism.

Nimesh Shah, partner at accountancy firm Blick Rothenberg, told the Financial Times: "The proposal makes complete sense and has been a longstanding issue for “shareholders who find their interest fall below the 5 percent threshold, often beyond their control.”

2017: A Record Number of Global Business Acquisitions

Tuesday, January 9th, 2018

Fact: 2017 was the biggest ever in terms of numbers of mergers and acquisitions across the globe.

Data from Thomson Reuters put the total value of international transactions at $3.5 trillion, with over 50,000 deals done.

businesses for sale

Mergermarket have also released their 2017 report which fairly closely mirrors Thomson Reuters’ data.

The difference between the two surveys is that Mergermarket looks at deals over US$5 million (about 18,400 transactions), whereas Thomson Reuters’ data looks at deals done over US$1 million.  (more…)

How the Autumn Budget will benefit small companies

Friday, November 24th, 2017

Earlier this week the Chancellor, Phillip Hammond, unveiled the much-anticipated Autumn Budget, a document that sets out how the Conservative government will direct its spending and taxation policies going into 2018.

The country’s smaller businesses will be pleased to learn that the government have walked back plans to raise business rates, particularly those for smaller businesses.

The inflation measure used to calculate business rates will be switched from RPI to CPI as of April 2018 – two years earlier than originally planned – to save SMEs an estimated £781 million, according to business rates expert CVS. Revaluation will be changed as well after causing so much chaos earlier this year, with revaluation periods changed from five to three years.

All of these will serve to save small business money and administration headaches – which is good news for anyone hoping to buy a smaller enterprise.

So too is the news that the VAT threshold will remain at £85,000, despite whisperings that this would be lowered. This remains one of the highest thresholds in the world and goes against suggestions that reducing it to a more EU-compliant £25,000 could raise as much as £2 billion for the exchequer.

On the contrary, maintaining the current VAT threshold means the UK can remain true to its “nation of shopkeepers” ethos and promote small business.

As Mike Cherry, national chairman of the Federation of Small Businesses, says: “Dragging thousands of more small firms into the hugely complex VAT regime would have caused a significant drag on output at an already challenging time for businesses.”

More good news for SMEs came throughout the rest of the Budget: an increase in the scope of Enterprise Investment Schemes will unlock another £7 billion of growth investment for small firms, for one, and a government commitment of £2.3 billion of research and development funding for new companies.

Emma Jones, the founder of a small business support group, Enterprise Nation, describe the Autumn Budget as “solid”.

She added: “'This is what we've been saying for a while should be the role of Government when it comes to enterprise creation and support; build the right environment and conditions for businesses to prosper and thrive, and then let businesses do what they do best.”

Betting companies limber up for autumn of dealmaking

Monday, October 9th, 2017

Some of the most globally renowned betting groups are preparing for a round of multibillion pound dealmaking in an effort to establish industry dominance.

One of the first deals is set to be a previously thwarted merger between an Isle-of-Man headquartered online group GVC Holdings and UK bookmaker Ladbrokes Coral. According to sources, the two groups have already agreed the shape of a new executive team and board, and are getting ready to make the next steps.

At the same time, other well-known companies including William Hill, Paddy Power Betfair, 888 Holdings and Jackpotjoy are making their own plans to out-strategise their betting rivals.

The majority of the new deals are expected to be carried out after the outcome of the UK regulatory review is published later this month, according to interviews with more than 15 senior industry executives who revealed the information to the Financial Times on condition of anonymity.

As yet, the unknown impact on income that any regulatory reform would have makes it impossible to assess the value of gambling companies, which is leading rivals to prepare plans that can be put into action after its release.

David Jennings, head of leisure research at Davy, the Irish wealth managers, said "After the review, it won't be the commencement of talks, it will be the continuation of them."

Gambling groups are beginning to realise that greater scale can help to stave off the competition from newer, online businesses and increased regulatory scrutiny. Newly enlarged companies would be able to operate several different brands, but save money overall by unifying these systems into a single platform and single marketing budget.

In 2015, Paddy Power and Betfair spearheaded this movement by combining to create the world's largest gambling company, with an estimated value of £7bn. The two brands are still integrating, however, which makes it unlikely that they'll be engaging in more high-value deals anytime soon.

Revealed: “Hot Sectors” in the acquisitions market right now

Wednesday, July 26th, 2017

The ‘hot’ acquisition sectors are revealed in an exclusive video interview with Rob Goddard of Evolution Complete Business Sales.

The transcript of the interview follows:

What are the ‘hot sectors’ in the acquisitions market right now?

The sort of industries that are hot sectors at the moment would be anything in and around the IT and telecoms, integration side, globally.

Movement, storage of information, how that’s transmitted and through what devices.

Pharmaceutical, bio-science anything that’s niche and cutting edge gains a lot of interest on the buying and selling market.

Pharmaceutical, medical and health care are usually fairly common throughout the years. Not just those sectors where companies are supplying products and services, but companies that are selling into those sectors. They might be consultancy or software that’s selling into pharmaceuticals. It might be linguistics/translation selling into the medical market.

Those are the “hot” ones but it’s not an exclusive list at all.

Subscribe to the Business Sale Report for access to more exclusive videos and inside track access to the latest deals and business sale opportunities.

View the pervious video in our mini series – The most costly buyer mistakes revealed here.

Most costly buyer mistakes revealed

Tuesday, May 9th, 2017

The most costly buyer mistakes are revealed in an exclusive video interview with Rob Goddard of Evolution Complete Business Sales.

The transcript of the interview follows:

What are the most costly mistakes that a business buyer can make?

I think to buy a business that doesn’t work out.

If you look on the internet you’ll find that the failure rate of an acquisition is between 50% and 80% in this country, depending on what sector you look at, within 5 years of the acquisition taking place.

It’s a high-risk strategy – where it works, it works extremely well.

And there are all sorts of reasons why that failure rate is so high in this country.

One of the things is buyers don’t take advice from professionals that are in the sector.

Another reason is they don’t do their due diligence properly. Because most people who are selling probably won’t tell you everything about their business. It’s like selling a second-hand car. They will tell you all the nice bits, all the bits that work well. What they often won’t do is tell you the things they are not happy with, the things that don’t work well. It is the buyer-beware aspect. And there’s a high failure rate.

Another costly mistake is buying a business for ego. It’s a no-no in terms of acquisitions.

Just because you have the cash to buy something doesn’t mean you need to buy it. It’s got to fit with your strategy for your overall business. Buying the wrong business, at the wrong time and for the wrong reasons is probably the most costly mistake a buyer can make.

Just because you can doesn’t mean to say you ought to.

What can be done to prevent these mistakes from happening?

When you’ve got several million pounds to spend or more, if you’re in that lucky position of having surplus cash, just because you’ve got the cash to spend, spend it wisely and make sure it’s in keeping with what you want to achieve with your main business – otherwise it could be a very costly distraction.

We try and find out: why do they want to buy? Why do they not just set up in competition with existing players in the industry? We want to tease out their motivations for acquisition. Increasing turnover shouldn’t be one of them – it’s the old adage of turnover is vanity, profit is sanity. If you make the wrong acquisition your bottom line could go through the floor. Don’t buy the wrong thing for the wrong reason.

Subscribe to the Business Sale Report for access to more exclusive videos and inside track access to the latest deals and business sale opportunities.

View the first in our video mini series – The most common hold ups in a business acquisition here.

Founders don’t always win big on ‘successful’ exits

Monday, April 3rd, 2017
You start a business. It grows. Exponentially. Bigger and bigger. More customers, more sales. Suddenly people are knocking on your door. Venture capital houses, who want to invest money in your business and help you grow. They come in and establish themselves. More good times ahead. All of a sudden you’re a well-known name. You start to attract interest from buyers, perhaps a bigger rival. You sell. Payday. You win big, right? Live happily ever after.

Well, maybe not.

Venture capitalists are known for making apparently risky moves – investing in young start-ups still getting a feel for things, perhaps in the fluid tech or digital sectors. But these apparently risky moves are usually well-thought-out strategic investment decisions designed to ensure that if a company they’ve put money into does get snapped up, they will do very well out of it indeed. Potentially at the expense of the founder(s).

The most common hold-ups in a business acquisition

Sunday, February 12th, 2017

The most common hold-ups in a business acquisition are revealed in an exclusive video interview with Rob Goddard of Evolution Complete Business Sales.

The transcript of the interview follows:

It usually revolves around one topic which is that the buyer and seller or one or the other get lost in the detail.

They lose sight of the main objective which is to try and put two businesses together.

Or if it’s an investment play, that an incoming investor adds value to the business.

Often they can get lost in items of detail – what happens to the deal process is that it slows it down.

It also makes it more expensive because not only with management on both sides trying to iron out a deal, but if you’ve got lawyers acting – and accountants and other advisers – the bills quite often, particularly with lawyers, can extend. Especially if you’re playing your lawyer by the hour.

One’s got to be careful of dragging out the deal negotiation process unduly. It will get expensive and something comes into play – which will be the subject of my second book – which is deal fatigue.

Rob Goddard
With buyers and sellers there comes a point when it goes on for far too long and one or both parties just get tired of it all.

They keep going round the houses and nothing seems to be able to be crystallized. You can be 18 months down the line and there’s nothing concrete, nothing materialized and no agreement to go forward.

What does this mean for the deal?

Stalemate! One or the other will fade away, disengage from the process and you may have lost a year, 18 months, two years. Three years is the longest period of time I’ve heard about which is incredible. It should be done over a three, four month period to negotiate, to construct a deal.

And then get the lawyers involved and make sure the lawyer is on an hourly rate. Sorry lawyers, fixed price!

Subscribe to the Business Sale Report for access to more exclusive videos and inside track access to the latest deals and business sale opportunities.

Survey of pub sales reveals large increase in freehouse deals

Thursday, January 5th, 2017
Green Man Pub
The volume of operational freehouse pub sales has shot up by 150 per cent in the last year, whilst bottom-end pub sales are down by 28 per cent.

This is according to the annual ‘Survey of Pub Sales’ carried out by leisure property specialists Fleurets. The survey revealed the stability of the pub sales market in general, which is surprising considering the political, regulatory and economic turbulence over the past twelve months.


Manny Stul – EY Entrepreneur of the Year 2016

Tuesday, October 11th, 2016

EY’s Entrepreneur of the Year Awards is an annual celebration of the energy and strength of businesspeople the world over. The awards aren’t just about individuals; they shine a light on the passion and spirit that continues to reinvigorate the business world and beyond.

Manny Stul

Manny Stul – EY photo