With any industry there are common phrases or acronyms used that unless you are familiar with them can initially be quite confusing. The business agency world is no different. We wanted to take the opportunity to explain 3 of the most common used acronym’s we use.
- SAV – This means Stock at Valuation. Typically most businesses carry a certain level of stock on a daily basis to be able to trade effectively. When you sell a business the stock is usually paid for in addition to the agreed price for the business itself and as the term suggest the stock is independently valued and paid for by the buyer of the business on the day of completion. Typically in pubs and bars they will hold around £3k to £5k of stock. Most pubs will have a weekly or twice weekly delivery (depending on their size and popularity) and this will reflect in the level of stock held. On the other hand, businesses such as care homes don’t really hold any stock and the price of the business will include everything within it on the day of completion.
- NDA – This means Non Disclosure Agreement. In certain sectors businesses listed for sale are always listed on a ‘Confidential Sale’ basis. Typically this applies to businesses such as care homes & children’s nurseries where the staff and residents or children typically will not know that the business is for sale and the owners don’t want them to be aware until a new buyer has been found. An NDA is used to prohibit the flow of information to prospective purchasers and full details are only released once an NDA has been read, completed, signed and returned to the agent marketing the business for sale.
- EPC – This means Energy Performance Certificate. The vast majority of businesses or properties for sale must have an EPC with them before marketing of the business or property can commence. AN EPC measures the energy efficiency of the building and gives it a rating. For most buyers and sellers this is a fairly pointless exercise and of little value to either party however there will some be implications for properties with a poor energy efficiency rating as they will not be allowed to be let or sold until improvements have been made to the property and its rating increased. An EPC last for 10 years and can be used multiple times. It needs to be completed by an independent energy assessor.