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I want to sell my business... where do I start?


Paul Beason, FRICS, has some very useful advice. F


or the most part, the few years leading up to 2008 saw some very good sales of property management and lettings businesses. The onset of the credit and banking crises in the latter part of 2008, and the on-


going economic gloom, meant that the market slowed as companies ‘hunkered down’ to get through these lean times to ensure they come out of it stronger when things finally improve. Those who were thinking of selling their business, may well be holding fire until the bulk of buyers return but there are still deals to be done for the right business, and the demand for letting agencies remains stronger than other sectors, as companies seek to acquire consistent revenue streams that are the hallmark of property management.


30 l March 2012 l TheNegotiator


So for some owners, it may be time to reflect and look at their business to ensure that when the time comes, it will be attractive to buyers. For those looking to sell now, the same things will equally apply.


As an example of future planning, we have recently been instructed to act as accountants on a start-up lettings agency business. The long-term strategy for our client is to sell in the future and he wanted some initial advice to ensure that his business would be set up to maximise its potential in this respect. I set out below the points you may wish to consider. What do buyers look for and ‘like’ to see in a good lettings and management business? What is it that some buyers ‘don’t like’ to see? Some of it is obvious, but it’s a useful exercise to follow.


BUYERS LIKE:


Profitability They say that cash is king! And indeed it is, because, at the end of the day people buy businesses to make a profit. There is another very pertinent old saying, that ‘turnover is vanity and profit is sanity’? Keep an eye on your margins, keep costs down and maximise your profits.


Quality


A quality portfolio is most attractive to buyers; it should be mostly comprised of well- maintained or modern properties which are readily lettable. What is the balance of your portfolio like? Are some of your properties dragging the quality down?


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