How important is business maintenance?

Thorogood & Associates

Most estate agents will advise that a well-maintained house, presented nicely, will secure a better price and sell quicker.

Leaking gutters will indicate poor maintenance and potential buyers will wonder what else lurks under the rafters. DIY electrics, as opposed to professional certified repairs, will cause concern when the survey takes place and the potential buyer may withdraw or demand a discount to cover those repairs.

So when it comes to business, why do business owners often fail to maintain their business in good order? Why do they put off updating their Employment Handbook, obtaining the electrical certification for the premises, or ensuring that financial accounts are up to date?

Keeping on top of business maintenance across all areas, is no different to maintaining a house. When you come to sell, there will be far less to fix and you, as the owner, will be in a far stronger position.

Regular and preventative maintenance of the business ensures that the business owner is more prepared for sale, but also reduces the barriers to sale.

Ask yourself the following questions;

1. Are your management accounts and financial accounts all up to date and properly filed?
2. Does your financial reporting system give you enough detailed analysis to know how your business is really performing and are your costs being effectively managed?
3. Are all of your tax and regulatory matters up to date and in order? (PAYE, VAT, Corporation Tax and Companies House returns.)
4. Are your company legal registers up to date?
5. Is your Employment Handbook up to date along with all of the required policies and procedures?
6. Have you got a training plan in place for your management team and workforce?
7. Is your website working at its best and does it reflect your overall marketing strategy?
8. Is your business compliant with all the latest regulations for your sector and is someone checking this?
9. Is your IT system fit for purpose? Does it support your business as effectively as possible? Do you have the appropriate security and backup processes?  Are you GDPR compliant?
10. Have you prepared a Business Continuity Plan detailing risks, up to date assessments and preventative actions?
11. Do your insurance policies cover all business risks and in particular key personnel? Do your insurance brokers properly assess your business risks and ensure the insurance is appropriate?

Leases on premises need to be kept under review because of lease break points, terms and potential repair obligations.

Thorogood & Associates UK assist businesses to become Investment or Sale ready. Spending some time and resource checking that all areas of the business are in good order is money well spent and reduces the issues arising during the Due Diligence process.