Buying a business in Liverpool

Liverpool's business base has two characteristics a buyer should understand before looking at any specific accounts: a lot of it is tied to the port, and a lot of the rest is tied to visitors.

The regional picture

These are North West figures rather than Liverpool ones; the ONS does not publish business demography at city level. What they describe is an active, churning market in both directions rather than a straightforwardly easy one.

The two local shapes

Port and logistics

Warehousing, haulage, freight forwarding, customs and related services. These trade regularly to private buyers and the diligence differs from a typical services deal in three ways.

Assets are valued separately. Vehicles, handling equipment and racking are valued alongside the trading business rather than inside the multiple, the same way a freehold is. Multiplying a profit that is already higher because the fleet is owned, and then adding the fleet, counts the same benefit twice. Get an independent view of what the assets are actually worth: book value follows a depreciation policy chosen for tax and diverges from market value quickly.

Licensing and compliance are part of what you are buying. For anything operating vehicles, the operator licence, the maintenance records and the compliance history are due diligence items in their own right, and they do not automatically follow a change of ownership in the way a lease might. Ask early what is required and how long it takes, because it can gate completion.

Concentration is frequently severe. A haulage or forwarding business with two or three large customers is a common shape. Get the revenue split by customer for three years and check the material contracts for a change of control clause, which lets a customer terminate when the business is sold.

The upside of an asset-heavy business is that it is financeable. Asset finance secured on the equipment is often the cheapest money in an acquisition and refinancing existing assets on completion can fund part of the price. Our guide to financing an acquisition covers how those layers stack.

Tourism and hospitality

Substantial, and seasonal in a way an annual figure hides.

What else trades

• Health and life sciences. Including dental practices and care services, where regulatory barriers are real, demand does not follow the economic cycle, and consolidators buy repeatedly. The service rating is part of the valuation.
• Professional and B2B services. Accountancy, recruitment, IT support. The most transferable earnings and the most contested prices.
• Trades and property services. Frequently profitable, frequently owner-dependent. The owner dependence decides the price more than the trade does.
• Retail and leisure. The ones that trade well are usually doing something a website cannot.

The standard checks

The lease. In full. Unexpired term, whether it is inside or outside the security of tenure provisions of the Landlord and Tenant Act 1954, the rent review pattern, and whether a change of control requires the landlord's consent. For a yard or warehouse also check the schedule of condition, because dilapidations on an industrial site can be a substantial figure nobody has quantified.

The rates. Public on the Valuation Office Agency's site for any commercial property in England. Look them up before the first meeting.

The accounts. Reconcile the management accounts to the filed accounts, and take the adjusted profit schedule apart with the evidence behind every line.

The full scope is in our due diligence checklist.

Why an asset-heavy business is easier to fund and harder to price

These two facts pull in opposite directions and both are worth understanding before you offer.

Easier to fund, because a lender can take security over something that retains value if the business stops trading. A leasehold consultancy whose worth is goodwill and relationships offers a lender almost nothing to recover; a fleet and a racked warehouse offer a great deal. That is why the same profit supports materially more borrowing in this category, and it is the single biggest reason a first-time buyer can reach a larger business here than in professional services.

Harder to price, because the value now sits in two places rather than one and the arithmetic has to keep them separate. A seller who has added the assets to a multiple that already reflects owning them has double counted, and it is a common and entirely innocent error rather than a trick. Our guide to how UK businesses are valued sets out the rule: assets and freeholds are added to the trading value, never multiplied by it.

The practical consequence is that you need two numbers from the outset, an independent view of the assets and a defensible adjusted profit, and you should not accept one figure that blends them.

For a Liverpool seller

If the business is seasonal, present it as seasonal. Monthly figures across three years and a straight account of how the quiet months are funded. A buyer who is told is looking at a trading pattern; a buyer who works it out in week six is looking at a problem, and those are worth very different amounts.

If the business is asset-heavy, have an independent valuation of the plant ready rather than the fixed asset register. It is the number a lender will want and it is the one that decides whether your buyer can fund the deal at all.

Where to look

Search what is listed by sector and location, free, no registration. Most listings are confidential, so expect a sector and a broad area rather than a name.