If you are considering selling your events business as you wish to retire or direct your efforts elsewhere, taking the business transfer route can provide a suitable alternative which can reap financial returns and enable business longevity. Passing on leadership can help preserve the bones of your events business, maintain relationships and fulfil ongoing commitments. There are many reasons you may wish to sell your events business, including Covid-19 pressures.
The events sector consists of a varied range of businesses, from wedding suppliers, equipment hire agencies and corporate event planning, to catering services, conference centres and venue decorators. Due to the varied nature of corporate and personal events, event businesses support a large chain of suppliers and workers, from florists, audio technicians and lighting specialists, to marquee and tent hire services and mobile/pop-up services, such as food stalls and bars.
If you are considering selling your events business, the first step is to obtain a valuation to determine the financial worth. Working with established brands and maintaining valuable relationships can contribute to the value of the business. Lead generation is a key contributor to the long-term success of an events business and how event contracts are secured, such as on a recurring basis.
If your events business branches between providing corporate and personal event services, spreading your customer base can help reduce the risk. In addition to this, you can feed additional cash flow into the business and expand your service offering. By increasing the options available to customers and covering both business and personal needs, you can secure more custom, increase your market share and appeal to prospective buyers.
If you are considering selling your events company, you will need to prepare your business for sale to ensure that it is presented in the best form and any outstanding affairs are settled. The efforts put into strengthening your business during this stage can result in generating greater sale value, such as through tighter credit control measures and streamlining business operations. By carrying out a valuation of your business, you can calculate the worth of your events company and assets, taking into consideration how much you are likely to generate from the sale. This can help plan your future financial position after transferring the business to another owner.
This stage will vary for each business as it will depend on the size of the business, the specialisms and the type of events catered to. For example, if your business provides prop hire services, you may need to review stock and inventory to update your records. If you are a venue operator operating across multiple locations nationwide, this process may take longer as you will need to collate the financial information for each venue and take note of assets across each location.
Prospective buyers seriously interested in the sale of your business are likely to carry out due diligence to check the financial health of the company and reputation. Due to the nature of the sector, events businesses may hold accolades, awards and qualifications to strengthen their standing. Collating press coverage can be instrumental, in addition to your portfolio of hosted events. By showing care towards how your business is perceived and communicating transparently, you can attract the right kind of buyers. At Selling My Business, we offer a business valuation to event companies to help you determine the value of your business.
"After successfully operating my grade II listed events venue for over 27 years, with no successor lined up for my family business - I was ready to prepare my events company for sale. The Selling My Business team helped secure a buyer in time for my retirement. "
Henry - Licensed Venue and Function Space, Liverpool
A business valuation is a process undertaken to calculate the monetary worth of your company which can then be used as a starting point to establish a sale price. There are many areas which are taken into consideration when determining the value of your business, however, the final sale price may be influenced by mitigating factors, such as buyer appetite, economic conditions or changes to tax legislation when buying an events business. The value of each business will vary based on the following factors:
Location: Is your events business mobile or fixed at a location? If your events venue is situated in an accessible, central location, providing extensive car parking spaces and well connected to key surrounding areas, this is likely to represent more value than a venue tucked away in an unknown suburb, unless this serves the needs of the business. If your events business is relocatable or can be operated remotely, this can instantly expand the reach for prospective buyers.
Tenure: If your events business consists of a fixed property typically functioning as a warehouse, production/manufacturing base or hire venue, the tenure type, whether this is leasehold or freehold will influence the overall value of your events business and final purchase price.
Assets: If company assets can be converted to cash or represent the potential to generate cash, they are likely to contribute to the value of your business. Due to the nature of event businesses, stock, inventory and company vehicles typically represent most company value. If industry equipment or vehicles are purchased through asset finance, the outstanding loan facility will be taken into consideration when calculating the value of your business. When preparing your business for sale, you will need to address outstanding debtors and creditors. The standard of equipment on offer can distinguish your business from other businesses in the market and raise the value of your company.
Size: The size of your events business is likely to impact the value, including factors such as turnover, net profit, capacity and national/regional coverage. For example, if you are a community centre operator hosting small events, your business is likely to generate modest income. On the other hand, if you are a wedding planner involved in venue coordination, venue dressing, food tasting, securing suppliers and providing logistical on-the-day support on a nationwide level, your business is likely to be worth more.
There are numerous factors which can mitigate the worth of your business, the starting point being assessing company assets against liabilities. The financial health of your events company will influence the strategy forward as if your events business is on the brink, it is likely to be of interest to a niche range of buyers specialising in business turnaround. If your business is healthy and thriving, this is likely to widen the pool of buyers.
At Selling My Business, we offer an events business valuation through our in-house valuation team who have years of experience under their belts. The SMB team can go one step further by sharing their knowledge and understanding of the events, entertainment and hospitality industry, helping you increase your chances of generating interest. We are proactive in our approach and you can depend on us to share recommendations to maximise company value and successfully source a buyer for your events business.
We require three years’ worth of historic/recent accounts to assess company assets, liabilities, cash flow, profit and loss. This will help gauge the health of the company and calculate how much your events business is worth. Valuing an events business can help determine an asking price, taking into consideration the assets of the business, such as machinery, equipment, vehicles, shares and property. Common questions encountered by the Selling My Business team from business owners are about how to value an events business. The SMB team can help you navigate the process from the first stage of carrying out a valuation of your events business, through to negotiating a final sale price.
The coronavirus pandemic led to hampered business activity for events businesses as mass gatherings faced blanket cancellations and social distancing measures resulted in large events to be significantly scaled-down. As existing and upcoming events faced cancellations or postponement due to Covid-19 uncertainty, the well of new bookings also dried up. As customers waited for Covid-19 transmission rates to reduce, event businesses were unable to trade until the relaxation of public health measures. The service-based industry which relies highly on the physical interaction between guests to deliver the full scope of services faced an unprecedented threat to survival.
As the events sector reopened with strict social distancing measures in place and reduced guest capacity, event businesses started to recover from the impact of Covid-19 and developed a thick skin to weather the impact. In addition to impacting the productivity of events businesses, Covid-19 also threatened the livelihood of contractors, freelancers, part-time and full-time employees supporting the industry.
If your events company is financially distressed or struggling to stay afloat, you may consider selling your business as an alternative to company liquidation or sell part of your business to recover from the long-lasting impact of Covid-19. This route may generate greater returns as there is a dedicated market for the sale of financially ailing businesses made up of insolvency professionals and business turnaround experts.
Contemplating selling your business? Our free, comprehensive guide will walk you through how you can sell your company. Our FREE guide covers all of the essentials, including:
Plus much more...