The Stages of Selling a UK Apprenticeship Training Provider

Selling a UK apprenticeship training provider can be relatively straightforward if you plan out each stage of the sales process. The problem is that many managing directors are unaware of what goes into selling a business, leading to missteps that cost both time and money.

Today, the UK’s private sector business population consists of 2.1 million actively trading companies. Yet only a tiny percentage are on the market at one time. Many entrepreneurs don’t know where to begin when it comes to selling an apprenticeship training provider, which is why this guide informs you of each distinct stage of selling one of these businesses.

Preparing to sell an apprenticeship training provider business

 Before moving to place your apprenticeship training provider on the market, you have several areas to address to make it market-ready. Ensuring your business is as attractive a prospect as possible will not only allow you to ask for a higher price but also mitigate any concerns a potential buyer might have.

The first step is evaluating your business. Many apprenticeship training providers will do this months in advance of putting themselves on the market because it gives them a chance to enhance their value as far as possible.

Elements a buyer will consider when determining what they are willing to pay include:

·  Revenue and profitability

·  Existing contractual agreements

·  Compliance with the Department for Education (until 2025, this was managed by the Education and Skills Funding Agency (ESFA) and the Institute for Apprenticeships and Technical Education)

·  Growth potential

Knowing your value isn’t purely about maximising your training provider’s value but about giving you the chance to streamline your operations and address any liabilities on the balance sheet. Giving yourself enough time to deal with any headwinds that impact your valuation will ultimately pay dividends when the sale eventually goes through.

The first steps to selling an apprenticeship training business

After preparing your business for sale, you can now take those first steps to putting your firm on the market and identifying potential buyers. What you do at this stage will often determine whether you can sell your business and how quickly you can sell it.

Here are the three most important steps at the beginning of the process. Get these in order and you should have few problems attracting your initial wave of potential buyers.

Set a fair asking price

Setting a fair price is a balancing act between not deterring buyers and not leaving money on the table. That’s why hiring a professional valuation agent is crucial for getting a sense of what your apprenticeship training firm is actually worth in today’s market.

Factors they’ll take into account include:

·  Margins

·  Revenue trends

·  Number of apprentices

·  Repeat business

·  Contract stability

·  Market demand

Prepare your sales documentation

When a buyer approaches you, they’ll expect to receive certain information about your business. This is not yet the more in-depth due diligence stage, but the initial package of documents that provides comprehensive data on your business.

Typically, buyers will expect to see:

·  Three years of audited accounts

·  Client lists

·  Contract lists

·  Staffing structure

·  Compliance records

·  Operational manuals

Ensure you have these documents in advance to speed up the process. It also demonstrates to the buyer that you’re well-prepared and organised for the sale.

Identify potential buyers

The last step is listing your business and identifying potential buyers. How you pinpoint interested parties largely depends on your sales strategy. Some apprenticeship firms reach out directly to potentially interested parties, whereas others list the sale publicly and leverage their professional networks.

Ideal buyers for apprenticeship training firms could include competitors seeking to expand, investment groups, conglomerates within the education sector, or even independent entrepreneurs. Research your target market and tailor your marketing strategy accordingly, rather than simply listing and hoping.

Utilising a business broker like Hilton Smythe

Selling a business in a highly focused sector like apprenticeship training can be challenging because of the limited number of buyers and established portals. Working with a business broker, such as Hilton Smythe, is often the route apprenticeship training firms will go down to guide the process.

Alongside a business broker being able to advise you throughout the process, Hilton Smythe also provides access to pre-qualified buyers. This ensures that your apprenticeship training firm is placed in front of serious prospects who will fully engage with the process.

Crucially, it’s your broker’s job to maximise the value of any sale. At Hilton Smythe, we possess consultants with decades of experience in bolstering values for businesses within the education sector. Examples of what this could mean include:

·  Advising on optimal deal structures.

·  Tax mitigation strategies.

·  Identifying and highlighting growth potential.

·  Negotiating terms/contingencies with potential buyers.

We also know that confidentiality is a cornerstone of selling any business. A business broker will manage this aspect until the correct time, when you inform the wider sector. This is something that protects the integrity of your business and preserves the sales process.

Ensuring a successful sale of your apprenticeship provider business

What does a successful sale look like? Sales can be derailed at any point in the process until both parties have signed the final paperwork. After engaging with a potential buyer, you’ll need to focus on issues beyond payment terms and indemnities. It’s standard practice to put in a transitional period to ensure continuity.

In practice, this means embarking upon a well-structured transition process, including:

·  Introducing new management to key clients.

·  Informing the Department for Education about a change in control.

·  Providing any agreed-upon training.

·  Transferring any documentation from one owner to the next.

One of the biggest sticking points for sales isn’t the price but whether a new owner can take control with minimal friction. Ensuring a successful sale means demonstrating to a buyer that they have growth potential, but without needing to implement an immediate overhaul of the entire organisation.

At Hilton Smythe, we know that the value of a business broker is essential not only for managing the procedural steps of the selling process but also for demonstrating value to buyers. If you’re ready to take the first steps to selling your apprenticeship training provider, contact us today.