Why January Is When Fire Safety Owners Start Asking What the Business Is Worth

The quiet fortnight is when owners first put a number on it

January is the month fire safety owners start asking what the business is worth, and the reason is structural rather than sentimental. The service calendar for the year gets built in the first fortnight, the annual BAFE audit date lands somewhere on it, and the act of laying twelve months of scheduled work out in one view makes an owner look at the whole book at once. That is close to the view an acquirer takes.

Asking the question is not the same as deciding anything. Many owners sit with a number for a year or more before they do anything with it, and that is the right order. A valuation is information; a sale is a decision, and the two do not have to happen in the same twelve months.

What makes January useful is that the year's evidence has just closed. December's servicing is done, the previous year's certificates are filed, and the renewal pattern across the contract base is visible in a way it is not in June. If you want an honest baseline, this is the month the data is cleanest.

A baseline reads the contract book before it reads the accounts

The first thing anyone valuing a fire safety business does is split the revenue. Contracted service and maintenance income sits in one column: the BS 5839-1 alarm servicing visits, the extinguisher rounds under BAFE SP101, the fire door inspection rounds. Project, install and reactive remedial work sits in the other. Two firms with identical turnover and a different split between those columns are not worth the same money, and the gap is not a rounding error.

Then it reads the certification. BAFE SP203-1 registration, how wide the scope runs across design, installation, commissioning and maintenance, and whether the audit history behind it is clean. Third party certification takes years to build, which is exactly why buyers pay for it instead of building it themselves. It belongs to the certificated company, and under BAFE SP203-1 a change of ownership must be reported to the certification body, which can ask for an extra audit or a new application.

Last it reads the dependency. Who holds the technical authority, who signs off a system design, who the larger clients actually ring when something goes wrong. If the answer to all three is the owner, the number comes down, because the buyer is pricing the risk that the competence walks out of the door at completion.

There is a fourth read, and it is the one owners underestimate: the state of the paperwork itself. Agreements filed as signed schedules with scope, site lists, visit frequency, annual value and renewal dates are worth more than the same work recorded on purchase orders and habit, because an acquirer pays for what it can verify rather than what it is told. In a sector where the product is compliance, the filing cabinet is part of the asset being sold, and it is the part an owner can improve in a fortnight.

What the tax position looks like from here

The tax side is worth understanding early, because it has been moving. Business Asset Disposal Relief, which gives qualifying owners a lower tax rate on a sale, was 10% until Apr 2025, then 14% for the 2025/26 tax year, and has been 18% since Apr 2026. Both steps were announced at the Autumn Budget in Oct 2024. The relief applies to qualifying gains up to a £1m lifetime limit, and it is the date the sale contract becomes binding with no conditions left, often completion day itself and never the handshake, that decides which rate applies.

A rate change is a reason to understand your position, not a reason to sell a business that is not ready. A sale of an owner-managed fire safety company runs for months from first approach to completion, and the preparation that lifts the price, contract documentation, certification currency, a second named technical authority, takes longer again. A rushed sale usually costs more in price than the rate change saves in tax.

So the January exercise is a small one. Establish an honest range for the business as it stands today, understand what the tax position looks like against that number, and then decide which year is the one, if any of the next few is. None of that commits you to anything. It tells you what your options look like.

If you are a few years from selling, Nick Hunt can help you plan and do this work as part of the Reads Pre-Sale Programme.