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Adding value to your waste business

13 March 2020

Corporate Finance

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So you have spent years building a successful waste and recycling business and a large proportion of your personal wealth is tied up in the business. You want to make the most of that and, when the time is right, be able to sell the business for the best value. At James Cowper Kreston our team has experience and understanding of what adds value to your waste businesses.

Here are three key areas to build value, but take a bit of time to do:

Contracted revenue – evergreen or rolling contracts or multi-year agreements add certainty to future revenues.

Direct customer relationships – growing your direct customer base rather than through brokers increases both margins and the value of that relationship to a buyer.

Build your management team – having a great team running your business and being capable of running it without your involvement reduces risk for a buyer as you step away from the business.

If you have less time some good housekeeping can really help:

Tidy site and fleet – make sure the site is tidy with little waste on site and vehicles are up to scratch.

Tidy books and records – preparing your financial and statutory information in an easy to use format makes it much easier for a buyer to see the value in your business. Buyers will want to see everything from management accounts to PUWER assessments.

Tidy your balance sheet – making sure that you are on top of your working capital, provisions and asset values can add significant value. Most transactions will adjust the price based on your balance sheet so this can increase or decrease what you finally get paid after the initial price is agreed.

By Ricky Thomas – a senior manager in our corporate finance team who previously led Biffa’s corporate finance team on over 20 acquisitions valued at over £120m.