Exit planning and the Autumn Budget: should you buy before you sell?

In the final part of our series, Linzi Wilson analyses the impact of the 2024 Autumn Budget on business owners planning to exit a business in the long term. Linzi outlines why short-term acquisitions could boost profitability and value for business owners looking to sell in the longer term.

Catch up on parts 1 and 2 of the series as Linzi examines the impact of the 2024 Autumn Budget on business owners looking to exit in the next 12-24 months and those looking to exit a business in the next three to five years.

As business owners rush to sell, will buyers gain the upper hand?

The 2024 Autumn Budget demonstrated that the Labour government is unafraid to tax asset-related gains. Business owners tempted by the changes to Capital Gains Tax (CGT) and Business Asset Disposal Relief (BADR) may rush to sell ahead of further (anticipated) changes. Thus, handing the balance of negotiating power to buyers as the clock ticks down.

Acquiring businesses at a lower price or on more favourable terms is a real possibility in the short to medium term. For business owners looking to exit further into the future, it offers the chance to build now for a more profitable exit later.

Will persistent inflation create opportunities to acquire competitors?

Despite signs UK inflation had plateaued, October’s headline rate of 2.3% suggests the present high interest rate environment is likely to continue. This will prolong the challenge faced by smaller businesses especially when taken in the context of the fiscal tightening that underpinned the 2024 Autumn Budget.

As a result, business owners may find more opportunities to acquire undervalued or struggling rivals at discounted prices. Such acquisitions could increase market share or provide strategic advantages ahead of an eventual, more profitable, exit.  

Could your business capitalise on Government investment in green technologies?

The 2024 Autumn Budget allocated £3.9bn to the clean energy sector in the UK. Where relevant to your core business, acquiring businesses within or related to the clean energy or sustainability sectors could be beneficial.

Such moves could align your company with government priorities and incentives. Potential buyers of your business in the future may accept a higher valuation due to your presence in growth sectors backed by government cash.

Consilium: trusted advisors in mergers and acquisitions

Consilium Chartered Accountants provides comprehensive services for business owners and entrepreneurs looking to acquire new businesses. From help structuring funding and business valuations to comprehensive financial due diligence and financial forecasting, Consilium is your trusted partner.

To arrange a confidential discussion, contact Linzi or learn more about our Mergers and Acquisitions expertise. 

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