BizSale Small Business Blog. Small businesses for sale.

Earlier on this year Chris posted on the blog heralding capital gains tax concessions for small business owners, due to begin in the new tax year. As April swiftly approaches, here are some details on the initiatives’ benefits to small business owners.

As well as providing tax relief, Alistair Darling has also promised to improve access to finance for small businesses.

The Small Firms Loan Guarantee is due to be increased by £60m this year and eligibility expanded. Alistair Darling has also added £30m to the available Enterprise Capital Funds.

The Treasury is considering giving 30 per cent of government contracts to small and medium-sized companies over the next five years, as well as dropping restrictions on factoring and invoice discounting in public sector contracts.

Tax relief on the Enterprise Investment Scheme and the Enterprise Management Incentive Scheme will increase by £100k and £20k respectively.

The Chancellor is also committed to encouraging more female entrepreneurs.

The Women’s Enterprise Task Force have welcomed a £12.5m capital fund for investment in women-led businesses which is to be included in the Budget this year. The plan also indicates a nationwide media campaign and regional pilots of business centres to support female entrepreneurs.

So overall, it looks as though 2008 will be a better year for small business owners with respect to their tax position and new allowances. This new focus on assisting small businesses will not, however, necessarily make taxation any easier. Benefits to small business owners will depend on how the Treasury’s promises are put into practice.

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A buyer is likely to offer more for your business if they are confident that the business is well set up and likely to be easy to take over. Do you have a well-defined strategy in your business plan?

The buyer wants to see a strong management team in place. If the running of the business is too dependent on you, the owner, this could seriously affect its chances of selling. It is, therefore, a good idea to encourage strong, reliable members of staff to stay with the company by having appropriate incentives to offer.

Take care that you are not overly dependent on a few customers and suppliers. The buyer will expect to see an expanding customer base and good relationships with a selection of suppliers.

Informal deals that you may have with your customers and/or suppliers should be formalised.

Other legal and financial issues that should be checked over include the following:

• Make sure your business complies with legislation such as health and safety etc.
• Ensure that you have ownership of any intellectual property.
• Check property contracts if applicable.
• Check that your finances are in good order.

Taking care of these issues could take time in some cases so plan in advance.

It is beneficial for you, as a business owner, to include an exit strategy in your initial business plan. This will prevent any hasty decisions to leave, which could render a business more difficult to sell.

Show that you are willing to help the buyer settle in to the business, this will be likely to help the sale. If it is appropriate for you both, you can agree to work with the business for a set period of time after the handover.

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