Running an apprenticeship training provider means training up the next generation of British workers. With over 2.5 million job roles in critical demand, and 90% of them requiring some form of work-related training, apprenticeship training is an industry with tremendous opportunities that has long gone overlooked.
But is your apprenticeship training business ready for sale? Selling a business isn’t like selling any old asset. In this guide, we cover the steps you must take to prepare your firm for sale and to give it the highest chance of securing a fair price on the open market.
What documents do you need to prepare to sell your business?
Selling your apprenticeship training provider requires gathering the necessary documentation to provide potential buyers with insights into the operations and performance of your firm. Likewise, you must demonstrate the necessary compliance documentation that applies to companies within this industry.
If you’re one of the one in five UK SME owners planning to sell in the next two years, here are the documents you’ll need:
· Financial Statements – Support valuation and due diligence with balance sheets, cash flow forecasts, and profit & loss sheets.
· Client Agreements – Produce apprenticeship delivery contracts, funding agreements, and subcontractor service contracts.
· Regulatory and Compliance Documentation – Provide documentation to prove your registration with the UK Register of Learning Providers, APAR/RoATP/UKPRN details, and evidence of your compliance. This may include quality assessments, such as Ofsted or equivalent reports.
· Asset Records – Outline of all tangible and intangible assets, including physical offices, equipment, intellectual property, and learning platforms.
· Operating Documents – Give insights into how your business performs its services, including training manuals, staff contracts, employer engagement strategies, and marketing materials.
Some companies also choose to provide pre-prepared due diligence packs. These are pre-built files filled with information about your apprenticeship training firm, including executive summaries, legal, financial, operational, and compliance files.
Check out our Selling a business FAQs for more information!
Valuing your apprenticeship training provider for sale
Estimating the value of any business is notoriously difficult because most entrepreneurs cannot be objective. Naturally, you must have a basic idea of what your firm is worth to ensure you’re receiving a fair offer.
Typically, calling in an expert valuation agent is the most reliable way of achieving a realistic valuation. They will use multiple valuation models to gain the most accurate valuation possible. The process will involve analysing your financial statements, performing a market comparison, and valuing your assets.
Generally, three broad categories exist for valuing a UK learning provider:
1. Income Approach – The income approach focuses on your organisation’s ability to generate future income. For example, the Discounted Cash Flow (DCF) method may be used to project cash flows three to five years into the future and then apply a discount rate to assess present value.
2. Market Approach – The market approach values your business based on comparable businesses that have sold recently. However, a market comparison relies on a sufficient number of transactions. It can also rely on similar recent valuations for apprenticeship training providers to arrive at a reasonable figure.
3. Asset Approach – The asset approach calculates the value of your tangible and intangible assets using fair market value and subtracts its liabilities. However, this relies on the accuracy of the concept of “fair market value”, which is best handled by a professional.
Typically, entrepreneurs looking to sell will commission a valuation report. These are performed by independent professionals and utilise multiple models to uncover a true picture of what your apprenticeship training platform could be worth. Find out more about the valuation methods used by expert witnesses.
How to prepare your apprenticeship training provider business for sale
Putting your apprenticeship training provider in a position to sell means maximising value and minimising risk. Essentially, it’s about putting your company in the best possible position for a prospective buyer to sweep in and begin operating it with as few outstanding issues as possible.
Ideally, the work should begin six to twelve months before any planned sale. The more time you give yourself, the better the position of your platform, which will ultimately pay dividends in higher purchase prices.
Strengthen your finances
The first step is ensuring your financial records are clean and up-to-date. Your records should demonstrate a period of sustained profitability and growth for the past few years. Properly prepared accounts are vital when selling a business. Moreover, commissioning a growth projection indicating a positive outlook in the years ahead will add further value to your company.
Another area to focus on is renewing any training and service contracts already in place. Securing these contracts provides a guaranteed income stream in the short to medium term and is an indicator of good relationships with your brand.
Guarantee operational excellence
How does your apprenticeship training provider operate? Unlike many conventional businesses, learning providers must abide by a range of compliance requirements to provide their services in the UK.
Take the time to go over your compliance and registration status with all of the various bodies you deal with regularly. This will inevitably mean going through your written policies and procedures for staff functions and service quality assurance.
Apprenticeship training providers should detail all of their operational processes in writing, starting with recruitment and enrolment and ending with training and certification.
Build your market position
Potential buyers want to see that they are purchasing a growing business with a strong chance of growth in the UK apprenticeship training market. It means not only having existing contracts in place but having sufficient diversification so your business model is not overly reliant on a single employer or a single type of employer.
Investing in client diversification does not just preserve your business and its prospects but is also a marker of your ability to deliver high-satisfaction training services and garner repeat business.
It’s also a good time to have documented evidence of your unique selling points and how these have been used as part of successful sales and marketing strategies in the past.
Future planning
One of the most straightforward ways of enhancing the value of an apprenticeship training provider for sale is putting the systems in place to assist in the post-sale transition process. Existing growth plans, such as future training programs and sector expansion, succession planning, and integration strategies, make your firm more of an attractive sales proposition.
Engaging with an expert business consultant or broker specialising in the training and education sectors can pay dividends at this stage. At Hilton Smythe, our consultants boast a range of industry experience, providing constructive, objective advice to help prepare your apprenticeship training platform for sale.
If you’re ready to learn more about putting your firm on the market, speak to the team now.