Selling a business

[Abeona]

I'm asking for advice on behalf of my step-sister. For the last 20+ years she has run her own small business in the green energy/ construction sector. (PV, solar thermal, heat pumps, underfloor heating etc). She fell into doing this almost by accident: a former boyfriend imported PV systems and she recruited and trained teams to fit the kit.

For the first decade she worked 24/7 and made serious money in the PV boom. Then she scaled back in order to take care of family commitments and after a health scare last year she wants to retire later this year at 58 and enjoy life. She hoped that her son would be interested in joining the business and would have been prepared to work with him for a year or two to get him going, but he has other plans. There are currently no employees — all the work is done through trusted sub-contractors. She assumed she'd just finish all the outstanding contracts and wind up. There is no office, no fleet of vehicles — just the content of her head, her contacts list and trading record, a good company name, a decent reputation and her MCS and other accreditations. She's turning down potential clients each week. She hasn't advertised for some years. Clients come via the architects, surveyors and planners she's worked with over the years, and through word of mouth.

Recently one of her former clients heard she was winding down and suggested she should sell the business. She didn't think it was worth pursuing, but she made a couple of calls and was surprised at the valuations she received, in the region of £150-250k. However, she was very aware that she was talking to salespeople and having met many sharks in her own sector, she is wary both of the valuations and the requests for payment in advance. Both the people she's been in discussion with are looking for money upfront to sell the business — £2-4k — and then take a 5% cut.

Any advice on how to value the business and how to sell it (if it's worth selling) would be gratefully received. Is it normal in these circumstances to pay a fee upfront?

She's known and so, more importantly, is her company.

She is “her company”

no employees
no machinery
no prime shop premises to take over the lease

baffling that two decades of business expertise and she hasn’t gone to her accountant or IFA immediately on this

So the business could come with a full pipeline of jobs

that have been secured solely on the basis of her and her expertise

Thanks for the more helpful comments from people who can see the potential.

so comments are only “helpful” if a poster can “see potential”

Speak to the accountant.
Get a manger in, train them up and spend a year/18 months and then sell.
Or sell with her as an employee with a view to stepping back.

There are a lot of buyers in the energy industry.

my builder…. recommended to me. Incredible man. He built my very large extension. He sub contracted the electrical work, decorating, plumbing. project managed.

i went with HIM.

If he retired and sold to another person or company… i wouldn’t go back to that person or company solely because they bought his good name!

this

The OP outlines a business that is very one person centric. Dependent entirely on her relationships and her accreditation

You can’t buy a 2 decade long business relationship…. you earn it

You can’t buy accreditation from official bodies… you earn it

Shes done well for herself
but there no selling something that exists entirely within one person who is retiring.

And her accountant will put her straight on this

Sorry to disappoint OP (as you seem a bit angry at any poster not saying essentially she will make millions! 😂)

I have sold 2 Businesses and advised people who also wanted to.
The valuation is irrelevant, its worth what someone pays.
Sounds like SHE is The Business and there may be no worth without her BUT she may be able to negotiate a deal where she withdraws slowly
So many companies will call her and tell her they can sell her Business, I get it now on a Dormant company I own that I know is worth nothing.
Her Accountant should be able to advise and if she does find a buyer The Accountant will need to be involved to provide numbers etc.
From just the info you have put here I doubt there is any value but its worth looking into. If she has a Competitor it might be worth speaking to them