When it comes to your exit strategy, don’t let short-term pressures impact long-term goals

By Nikki Whittle, partner and head of corporate – Lancashire, Brabners

The past year has brought a wave of external pressures which have impacted business owners in Lancashire and across the North. 

The new government recently set out its approach to raising tax revenues in the Autumn Budget – with one of the most notable changes, an increase to national insurance, causing concern for most. Now, the impact of the US election on the UK economy is being unpicked by experts, with significant potential implications for businesses supplying to the US.

How to plan for exiting your business 

For many entrepreneurs, the ultimate goal is to sell their business and maximise its value.

Even before the Autumn Budget, a survey by Handelsbanken revealed that one in five UK SME business owners planned to sell all or part of their business within the next two years. 

With growing economic pressures and the phased reductions in Business Asset Disposal Relief (BADR), which reduces Capital Gains Tax paid on business disposals - dropping to 14 per cent in April 2025 and then to 18 per cent the following year - some owners may feel compelled to sell now to avoid this increased tax burden, and this may be the right course of action depending on personal circumstances. 

However, at Brabners, our advice to clients is always to focus on the bigger picture and plan ahead if you can. In both business and personal matters, adopting a long-term perspective often yields greater rewards. 

Decisions should be driven by your long-term objectives such as what benefits your family, your legacy and your business over the next generation, rather than by short-term economic or political factors.

Preparing for a successful sale

The key to a successful business sale is preparation and Brabners’ corporate team works with our clients over several years to prepare a business owner for an exit which maximises value. 

This includes:

• Defining your long-term goals: What do you want to achieve post-sale—for yourself, your family, and your business?
• Getting your house in order: Ensuring all legal, financial, and operational documentation is complete, accurate, and up to date.
• Addressing liabilities: Resolving outstanding issues that could impact value or buyer confidence, such as loans.
• Due diligence: A buyer’s scrutiny will be rigorous; Brabners can help you anticipate and address potential red flags.
• Engaging key advisors: We collaborate with accountants, funders, Brabners Deal Advisory and other specialists to structure a sale that aligns with your goals.

Even with tax changes on the horizon, in addition to rising costs and microeconomic changes globally, entrepreneurs with a well-managed business and a clear strategy must think carefully whether now really is the best time to sell, especially those who have invested in a growth strategy which aims to increase the value of their business over the coming years.

Balancing short and long-term thinking

Brabners sponsored the North and Western Lancashire Chamber of Commerce’s Economic Survey for Q4 2024, the full report will be released this month.

Despite short-term pressures taking their toll on confidence over the coming quarter, with just 18 per cent of manufacturing firms and 33 per cent of service firms expecting to make a profit in the next three months, the longer-term outlook is brighter. As part of Brabners sponsorship we explored investment intentions - 34 per cent of respondents expected to invest in both digital infrastructure and skills over the next 12 months.

Investment is driven by long-term confidence and this intention for Lancashire companies to invest in their future chimes with economists’ predictions of an improving business landscape in the coming years. This month’s KPMG Economic Outlook forecasts UK economic growth to double this year from 0.8 per cent in 2024 to 1.7 per cent, followed by 1.4 per cent in 2026.

The UK economy currently faces pressures driven by UK and US new political cycles as well as increased costs, but where possible, business leaders looking to exit should focus on when the time is right for them to realise most value from their own business with a long-term view.

Brabners’ experienced legal advisers can support business owners prepare so that when the right time does come, they are ready to act quickly and maximise value.