Selling a lettings business is like presenting a gift to potential buyers. A well-wrapped package with a shiny bow, not only attracts more attention but also has a higher assumed value.
However, beyond the glittery surface lies the real substance that determines the worth of the offering. In the world of lettings, this substance often lies in the meticulous attention to compliance, something that can go a little off track when you’ve owned a business for a while!
For example, if you have 100 properties on your books, could an independent person go in and understand those properties within a day? Is every necessary document for each individual property in one place, or do have you things here, there and everywhere?
THE VALUE OF A COMPLIANCE CHECK
This is where a thorough compliance check, referred to as reverse due diligence, can be so important, as it can uncover any hidden risks or omissions that might deter potential buyers. Just like a home buyer would hesitate to invest in a property with a dodgy roof, prospective buyers will want to make sure there are no nasty hidden surprises.
The compliance process involves collating all necessary documents and ensuring they are up-to-date and easily accessible. From gas safety certificates to overseas landlord agreements, having everything in one place streamlines the due diligence process, instilling confidence in buyers and potentially averting the sale falling through.
Plus, it allows you as the seller to identify any risk factors upfront that could be red flags for buyers. Addressing these issues before the sales process, not only mitigates risks but also portrays the business as well-managed and investor friendly.
The goal of these preparatory steps isn’t to inflate the price, but to facilitate a smoother sale. Essentially when you’ve gone through the process of selling your business, you want to skip off into the sunset knowing you’re not going to have a claim made against you! If you decide to skip the compliance process, the purchase agreement is likely to be much stronger on the buyer side, leaving you open to future claims.
OPTING FOR AN INDEPENDENT COMPLIANCE SERVICE
Partnering with an independent compliance service can be the difference between navigating choppy waters or enjoying a smooth sail for both buyers and sellers.
Sometimes business owners understand the importance of compliance but decide that they could handle the process with their internal staff. This can be risky, and the findings might be seen as a biased view that a buyer won’t accept. An independent compliance consultant will go beyond a surface-level assessment. While a business owner may have a good grasp of their operations, an independent, deeper dive is often necessary to uncover hidden risks and ensure a seamless transition for all parties involved.
The cornerstone of an independent compliance service is typically an auditing framework, designed to assess compliance levels, and identify potential risks. By reviewing a representative sample of files, they’re able to deliver a report that pinpoints areas of non-compliance, highlights potential risks, and outlines actionable steps to rectify any issues.
By identifying compliance risks early on, you can feel empowered to navigate the complex waters of transactions with confidence and clarity.
DON’T NAVIGATE THE PROCESS ALONE
Ready to embark on a journey towards a seamless sale or acquisition of your estate agency business?
Partner with Atomic and we’ll walk you through the whole process.
Get in touch today for an informal chat and take the helm of your business’ future.
