Timing and Taxes

Insights by Robert Fiske.

As we rapidly approach the general election it would be understandable if you are wondering what the impact might be on your business and consequently have some influence on your time horizons to a sale. When people get closer to embarking on an exit, they understandably tend to get a little more risk averse. If there is additional uncertainty ahead (real or perceived), one may want to accelerate the decision to sell rather than risk some unforeseen forces devaluing your investment. So how should one make that decision?

We have long advocated that there are essentially three aspects to the timing of a business sale: Market timing, Business timing and Personal timing. The Market timing considers the health of the market in which you operate and the deal activity therein; the Business timing considers the health, performance and prospects of the business itself; and the Personal timing considers your personal drivers and objectives. Ideally all these aspects would be aligned but our general mantra is that if two of the three are optimal, then you should be able to achieve a successful sale. Having said this, we do firmly believe that in owner-managed businesses, the Personal aspect is really important. Don’t hang on in there if you really want out – the business is likely to suffer, value erode and your stress levels will just increase yet further.

This subject is just one of the aspects explored in our forthcoming virtual seminar – How To Get Top Value For Your Tech Business – which is taking place next week on Thurs 11 July. If the issue resonates with you, and you’d like to find out how to increase the value of your business before selling, then please do join us.

As one considers a sale, one must also consider life after a sale. One aspect of this is how to stay tax efficient with the proceeds and we are delighted to have the input of Richard Watson from Investment Quorum (IQ) to elucidate on this subject in our guest article.

See Guest Article: How to Stay Tax Efficient Leading up to Retirement, and Beyond