With the EU referendum vote taking place today, the polls are still very close. So the population is considering what will happen from the morning of June 24th onwards, if we do actually vote to leave the EU.

The “Leave” vote will trigger the start of a whole range of negotiations and eventual changes to various laws, regulations, deals and systems.  Exiting the EU will take years to achieve. The optimistic onlookers are estimating this will take two years. The majority expect it to take far longer.  And in reality, we have no idea how long this transition will take.  During that period, business will, of course, continue.  However, with an immediate likely impact to the markets, confidence and the credit rating of the UK, it’s expected that some recession will occur.  With so many unknown factors, decision-makers, investors and entrepreneurs all reassess their risk. And, until the dust has settled, only the most vivacious risk-takers will be prepared to invest in new ventures.

So if you are a business owner and planning on exiting your business in the next few years, how will this potential “Leave’ vote affect you?  Will you find a purchaser? Will you be able to achieve a healthy sum in return for selling your business?  Well there’s no doubt that it will be harder to achieve this, than in more settled times.  Deals will still happen. But the banks and lenders may once again retreat from lending to higher risk propositions, so that will definitely affect the number and type of purchasers that are able to complete such an acquisition.

If you are a business owner looking to exit, you need to be a highly attractive proposition for the fewer purchasers willing and able to take the risk of an acquisition. Consider the following:

• Is your business so well-managed and systemised that once you leave it, it will still run as smoothly? Or will the new purchaser have to replace you because you were integral in the running of the business?  The latter is far less attractive to them as they will want the post-deal integration process to be quick and easy. Create a manual with your sales/operations/admin systems, document how you review and manage the business (such as strategic reviews, KPIs, reviews of management information etc) and work yourself out of the business by delegating all your tasks.
• Is your working capital cycle slick and efficient?  Do you collect customer debts in swiftly, are under no pressure from suppliers, and maintain a low level of stock?  Or are you tying up cash in extending the cycle because you hold stock for many months/years, have aged debtors and are continually worried about cashflow?  Minimising your working capital cycle will make you more attractive.
• Are you realistic about the value you will receive for your business, and the way you expect to be paid out? Most deals nowadays have deferred consideration as a large part of the structure. It’s highly unlikely you will receive full payment at completion, and may often be tied to earnouts. If you want to minimise the chance that any earnouts will be based on the future results of the business, you need to remove the risk for the purchaser. Wherever possible, agree future sales, costs and general activity levels.  If you were to prepare a set of financial projections for the next few years, you need to be able to show that the assumptions you have used are not only realistic, but are as close to definite as possible.

And if you are looking to buy?  As always, consider the risk you are taking and seek to minimise it where possible. You should also focus in particular on whether this business will be impacted by any change in regulatory or legal requirements on companies, as a result of the negotiations to exit the EU.  And make direct approaches to businesses that meet your criteria.  Don’t restrict yourself to looking at those that are advertised for sale. Most business owners would be willing to consider an unsolicited offer, if approached in the right way.

Kirsty McGregor is founder of The Corporate Finance Network and The Association of Crowdfunding Experts.