Business valuation

[9mm]

Bit of background - a few years I started a few small businesses by way of diversification post 2008 crash. Some didn't get off the ground, some faltered and went nowhere, a couple took off. I'm now in the process of some important (financial + business) planning and I am considering selling one of these profitable businesses. The main motivation for selling would be capital raising and freeing up time to use on a new project at the moment but there is plenty of flexibility. Actually, it's not so much the time but when the time input is needed; it's in conflict with the new project. The business isn't in trouble and would be very easy for anyone else to run, something I think might make it attractive to someone looking for decent regular income for a low level of input of maybe an hour or two a day.

Its value (I think) lies in the fact it has a six year track record of year on year growth in a vibrant sector and it really can be run from a spare bedroom with no equipment requirements. There's scope for growth and diversification but I'd rather sell that potential than put in the effort to do it myself. I've also got the idea there might be people about looking for an alternative to an annuity, perhaps with a very small pension pot that is never going to deliver anything like what this business produces.

I can and do tell people how to run a business but one area I've never understood is that of business valuation and that's where I'd like some input. I've read about multiples and such like but can anyone give me a formula and/or checklist I can use to give me a starting point? I'm quite happy to share numbers and pretty much anything about the business apart from exactly what it is and what it's called. You can probably understand why I'm dubious about web-based services which appear to be based on value of business = (x-y)* 2 or 3.

[9mm]

Why then do so many people appear to use just such a thing?

[9mm]

desolate said:

9mm said:

Why then do so many people appear to use just such a thing?

I have no idea.

Values are anything from 0 x to 25 times profit. Every deal I have ever done has been different. Each sector is different. The amount of work and capital required to produce the profit is different.

So there is no magic formula.

Edit - if you put some detail up I will have a stab and explain my thought process.

I'll describe the business model and then you'll get a flavour. My only interest in keeping clear of identifying specifics is alerting potential buyers, competitors or associates. I'd rather do that in a controlled way, when I've refined my thinking about what the business might be worth. I completely understand that some sort of full disclosure is needed before any money changes hands but that isn't going to happen here and nor would you expect it to.

This is a business that delivers a service on a regional basis, pretty much 100% UK and Ireland, but there are no substantial barriers to taking it overseas. It's legal. Bad debt is non-existent.

There are no assets, no liabilities and no employees.

Associates, not employees, are provided with leads in their area. I (or you, should you buy this business) can provide the same service in your own area if you have the ability and the desire, thereby boosting your take. Alternatively you could possess none of the skills or desire and simply sub to a local associate. For all associates this represents lucrative part-time employment. Despite this, the skills they have are specialised, which makes them hard to source, especially when you pay the same as everyone else. I pay much more, which means I don't have that problem and my people don't leave me.

These associates are extremely well paid for what they do, more than they can earn from working for a competitor. This has contributed to high levels of loyalty - most having been with the business for several years. They can try and leave and set up on their own but this has never succeeded yet. I can't say exactly why, only that breaking into the market without national coverage is extremely difficult to do and setting up national coverage is also difficult when you will need the people who presently work with me. They earn very well so will require a considerable incentive and know they are giving up guaranteed income from me before they would go elsewhere - and they don't.

Leads are obtained via website (it has a top three, page one listing on most Google searches and doesn't need Adwords) and social media but as the business has matured so has the number of leads represented by recommendation or repeat business. Once a lead has been converted into a sale - tends to be quick and easy to filter the sales from the dross - it will be offered to an associate with a price/fee. If they don't want it, it will be offered to someone else. If anyone other than me delivers the service, I take a fee and they take a fee. If I do it personally, it's all mine. If I put everything to associates, this does not take more than a couple of hours a day and requires nothing more than a PC and telephone. However, over time a successful sales process has obviously been developed including templates and all the other things you would need to convert an inquiry into a sale. Associates are responsible for paying tax on their fee - I never see their fee as it's paid directly to them.

Some figures. Over five years the gross income has grown from £7K pa to circa £100K pa. Growth has been proportionate year on year although it has now slowed and I project the current year to exceed last year's income by a single figure percentage. The total payment to associates is around 40%. I would be close to 50% if I purely fed leads and didn't provide the service myself. The main reasons for the slowdown in growth are an inevitable maturation, a disinclination on my part to grow the business due to the time investment it would require and increased competition.

So there you have it. A business that grosses you £50K pa for two hours a day (probably six days a week for nine months of the year, much less for the other three months).

As you can imagine, I've looked at how much you'd need to buy an income of £50K a year. This isn't guaranteed of course, but what business is? The track record is indisputable and picking up on Eric's point, my personality isn't a part of it. With the systems and templates I have in place, anyone with a decent brain could run it and grow it. Should the market collapse, I have no-one to make redundant, no contracts to satisfy - I just walk away.

You'd be buying the business as a going concern, which includes website, domain name(s), customer list going back six years and the associate list. I'd be quite happy to guarantee to stay out of the marketplace.

I'd be really interested to hear what you think it's worth.

[9mm]

desolate said:

So in essence we are talking about a small internet marketing business with decent existing relationships and some of the SEO legwork done.

It depends on the market sector and my internet experience is limited to insurance and sports related but I would say at the size it is and showing a growth plan that is slowing down I would say somewhere between 25K and 50K. Payable on the Drip over 12/24 months.

It may be worth a lot more in a sexy sector or to a competitor or associate. In my experience selling to someone you know will improve the business will get the best deal.


It may be worth paying someone a few hundred quid to draw up a sexy business plan showing different growth scenarios.

Thanks. I struggle with the idea that it's worth what I could pretty much guarantee you'd receive in the next twelve months if 'you' bought it from me now. That seems like quite a good deal to me and makes me think I'd be better off just milking this business until it stops providing an easy income stream and in that time subbing out the admin so I can get on with the other project.

Eric - I'm sure you know that I was being traditional tangible in my comments about assets and liabilities. There is no plant, no contracts, no debt, no employees, etc.

[9mm]

loafer123 said:

Definitely sell to your most trusted associate - they'll understand the business, believe you can make money out of nothing, and won't need to DD it too much.

It's not money out of nothing, it's a service, just not one I'm going to specify, but the model applies to all sorts of things. If I said I collect debts (I don't) and have X associate bruisers around the country (I don't), all of whom take a fee and that I also do some collecting in my own area, can you see the business model?

What makes this one a bit different is that the overheads are minuscule. Unfortunately my most trusted associate (and the least for that matter) doesn't have the cash to tempt me.

What's DD?

[9mm]

Eric Mc said:

9mm said:

Thanks. I struggle with the idea that it's worth what I could pretty much guarantee you'd receive in the next twelve months if 'you' bought it from me now. That seems like quite a good deal to me and makes me think I'd be better off just milking this business until it stops providing an easy income stream and in that time subbing out the admin so I can get on with the other project.

Eric - I'm sure you know that I was being traditional tangible in my comments about assets and liabilities. There is no plant, no contracts, no debt, no employees, etc.

No, I'm not a mind reader,. When someone says "no assets, no liabilities" I assume that's what they meant. So that would also mean that the business has none of the fol;lowing either -



No Debtors,
No Cash in the Bank or on hand,
No Stock,
No Work in Progress,
No Goodwill
No Intellectual Profit

No Creditors
No Bank Overdraft
No Loans
No Borrowings or financial commitments

And if it has no employees, who does its work? Even if you don't have formally hired staff surely the business must use people in some capacity to carry out what it does - or is it run by robots (oh - I forgot, no plant or equipment either).

There are no debts.
There is cash in the bank. It doesn't stay there.
There is no stock.
There is some work in progress.
I've indicated goodwill.
What is intellectual profit?

There are no creditors.
There is no bank overdraft.
There are no loans.
There are no borrowings or financial commitments.

Most of its work is done by associates - absolutely not employees - some by me personally.

See my debt collecting example above.

Someone approaches me to get a debt collected. If it's in my area, I collect it and pocket the fee in entirety. If it's in Northumberland I ask Big Dave if he wants to collect it for a fee. I get paid and Big Dave gets paid. No-one needs a loan, or special equipment. I just need a mechanism (website and phone) to process leads. Other people may also do debt collecting but they pay their employees or associates st, I pay the best money in the business, so I have the best (most successful) debt collectors. They stay with me and customers come back to me.

Get it?

Edited by 9mm on Friday 24th April 14:30

Edited by 9mm on Friday 24th April 14:31

[9mm]

Eric Mc said:

Sorry - I meant to say "Intellectual Property" (profits on the brain).

So, you DO use people. I'm not concerned whether they are called "employees" or not. The important thing is that you need a team of people to make it work and there will be commitments and reliance on them - whether they are defined as "employees" or some other expression, such as "associates".

I don't believe there is any intellectual property.

I said that I used associates on the first page. You must have missed it.

And yes, it follows that there is a reliance on them. Well-founded, based on the track record, but there is also a succession plan and when people have parted ways with me I have not found it difficult to replace them.

[9mm]

Eric Mc said:

So - the specific individuals aren't that important - just the tasks they do?

That's right. I suppose you could say they are like sports people and I'm the agent but they don't have individual brands like Beckham or Messi. Therefore if one goes I just recruit another with the same skills.

[9mm]

Quattromaster said:

I'm in the process of buying a small garden maintenance company, est 35 yrs, assets worth approx 10k.

One part time member of staff of 7k a yr, plus the owner.

Turnover of 58k with profit of 31k.

Asking price of 35k, deal done at 33k.

Good, bad, I've no idea, but I do think like anything, a business is only worth what someone is prepared to pay for it.

Thanks for your input. Seems in line with Desolate's thoughts.

I can't get excited about swapping at least half a mill over the next ten years for seven or eight hours work a week for a £50K one off payment. Seems like an incredible deal for the buyer so I think I'll just carry on as I am unless something changes. Maybe even look to develop the business. I think a chat with the accountant might be the next step, in case he has any other clients who might be interested.

[9mm]

desolate said:

9mm said:

Thanks for your input. Seems in line with Desolate's thoughts.

I can't get excited about swapping at least half a mill over the next ten years for seven or eight hours work a week for a £50K one off payment. Seems like an incredible deal for the buyer so I think I'll just carry on as I am unless something changes. Maybe even look to develop the business. I think a chat with the accountant might be the next step, in case he has any other clients who might be interested.

There's a lot more work required in Quattromaster's case though.

In general a business is worth more to those that work in it, to a supplier to secure distribution or to a competitor.

Is there a recognised industry group/association for what you do? May be worth touting it around there to see if anyone will offer a multiple of income.

In addition to my accountant idea, I can see potential in the ideas of selling to an insider or a competitor.

There isn't a recognised association and it's an unregulated business. Given that I'm not keen on a long payment plan for an insider I'll have to think carefully about approaching a competitor. To be honest, I have very little faith in the competition. Business ethics don't seem to exist in their vocabulary which is one reason why I have been able to differentiate my business in the marketplace. There are lots of other factors but a key one is that I feel that I'd be selling out loyal associates who would see an immediate reduction in income. I'm also grappling with the idea of how a payment plan would work that would satisfy both parties' financial needs yet protect me from the eventual new owner from screwing up the business before they had control and I had my money.

Edited by 9mm on Sunday 26th April 14:06

[9mm]

AyBee said:

Do you want the money or the time 9mm? If it's the latter, would it not be easier to find someone to help you run it for a profit share? PM me if you'd rather.

A bit of both but more the money. As I said a few posts up I can't see the point of giving up £50K or more a year for a one off payment of £50K. If the multiple starts increasing I will get interested but for now I've pretty much decided to withdraw from providing the service myself, add some associates and just treat it as an income stream I might use to subsidise another start up. As long as it doesn't take me more than five or six hours a week (which should definitely be the case if I stick to admin) then I'll be happy.

[9mm]

akirk said:

You mention that the % growth is declining due to lack of your drive in growing the business / increasing competitors - that for me would be instant warning flags in terms of buying a business - if I came to talk to you / did the DD / understood who was working for you as associates - what would be the block to stop me from setting up my own business / tempting your associates away / competing...?

i.e. what are you really selling - an ongoing concern for someone one wishing to not start from scratch, or something which I need to run a successful version of your business (client base / IP / process systems / etc.) which have a value where it makes more sense to buy than to reinvent?

if it is so simple to run, could you not just get someone local in to run it for you?

I think all businesses experience a slowdown in growth at some point. There are many reasons but the warning flags can also represent opportunities. This business works in a highly specialised field where it enjoys a great reputation with loyal customers, repeat business and recommendations. It would be quite easy and cheap to broaden its service using the existing customer base. So my lack of interest in doing it is equally a big opportunity for a new owner.

If you stick with my example of someone acting as agent for a national chain of regionally based debt collectors, with me doing some debt collecting but thinking of purely acting as agent, the blocks to stop you competing/tempting my associates away are obvious and not really any different. The problem for an existing competitor is that you will have to dramatically erode your existing profit margin as I pay my associates at least four or five times what they pay. So, as an existing debt collector, earning say £100 for a job, why on earth would you leave for £150 a job or even £300 a job, and leave someone who has provided you with all those £500 jobs for six years? Would you even leave for £500 a job - on a promise rather than six years of track record? These figures are all notional. If you want to set up in competition you will have to set up locally and hope to grow or regionally with an immediate team. Where will that team come from unless you immediately offer more than I do? I think if any of this was going to happen, I'd have seen evidence by now.

The reason that competitors exist is quite simple. They aren't as good and some customers are happy to pay less for an inferior service/product. Just as they are in the case of cars, airline travel, FX, watches, vets or hifi. I position this business as the best in the market, pay the best rates in the market but don't charge ludicrous fees. That's because the position in the market, associate loyalty and longevity are more important to me that squeezing every last drop of profit out of the business. Competitors come and mostly go.

So to answer your question, what I'm selling is a ready made income stream with the potential for growth, that can be run out of your spare bedroom for six or seven hours a week and gross you a minimum of £50K a year. I could indeed pay someone minimum wage to take care of the admin but I'd always pay someone a lot more because that would be in line with the way I treat my associates. This might be a problem for a purchaser who wants to increase profits by reducing fees paid but I'd see that as rather stupid greed. You would instantly make it easier for competitors or new entrants to tempt the associates away or incentivise them to try and work independently. Better imo to not be greedy and keep everyone happy.

[9mm]

berlintaxi said:

9mm said:

The reason that competitors exist is quite simple. They aren't as good and some customers are happy to pay less for an inferior service/product. Just as they are in the case of cars, airline travel, FX, watches, vets or hifi. I position this business as the best in the market, pay the best rates in the market but don't charge ludicrous fees. That's because the position in the market, associate loyalty and longevity are more important to me that squeezing every last drop of profit out of the business. Competitors come and mostly go.

So what are the barriers to entry for a competitor who decides they will pay better rates and lower fees than you?

What is the tax set up?

No different to any other business and it's competitors. Give it your best shot. Perhaps someone will try but they haven't done yet. As I said, for an existing competitor, they'd need to dramatically increase the fees they pay (and reduce their profits) in order to lure my associates. Why would they do that when they are presumably happy to service a lower quality client with lower quality associates? Charging lower fees (and reducing their profits) is another option but our fees are already seen as highly competitive - despite the quality being perceived as higher.

A new entrant to the market will need the associates. These are in short supply and I've already illustrated the choice an associate would have to make. Trust this new kid on the block with their promises over my track record. I guess a parallel would be something like house surveys. If it was as simple as lowering their fees and offering better rates to surveyors, only one company would provide the service. AFAIK they don't.

Ultimately, it's rarely as simple as paying better rates and charging lower fees or it would be simple to dominate a market. I have competitors and I'm sure some of them have thought of doing it but so far they haven't. Who would? The risks are considerable. On the other hand, should this business decline (for whatever reason) I walk away with no liabilities of any kind. There is a lot to be said for not being greedy and trying to wring every last penny out of a business.

I'm not going to comment on the taxation arrangements/business status to keep things suitably vague. It doesn't affect the saleability of the business in any way.

[9mm]

berlintaxi said:

9mm said:

I'm not going to comment on the taxation arrangements/business status to keep things suitably vague. It doesn't affect the saleability of the business in any way.

Of course it does, massive difference between a sole trader selling a business and a limited company, especially as you keep saying you have no liabilities.

It may have an impact on valuation and the degree of complexity but not the basic saleability.

If you just use the debt collection or house survey examples I've given it should be obvious why there are no liabilities but I'll say it again, trying to make it as realistic as possible.

You are, let's say, a commercial surveyor in Cornwall. You typically get paid £200 a survey which is the market rate. You could do a better job but to be frank there's little incentive. The people that employ you charge the client £2000 for the survey. The people who use your services often have big offices, big overheads and big liabilities.

I am a commercial surveyor in London. Due to being a very good surveyor who has built up a solid reputation I get to the point where I can't satisfy the demand that is coming from all over the country. One such place is Cornwall. I approach you and offer you £800-£1000 for a job that would have paid £200. I charge the client £2100. I have no overheads.

You are delighted, the client is delighted. I am delighted.

To add: if you try and go to the clients directly and charge £800-£1000 you won't get past reception because you don't possess the credibility I have with national coverage and the status that goes with that. You might get the odd job, perhaps at double your usual £200, but why wouldn't you work for £800-£1000 for me. You'd be mad not to.

Edited by 9mm on Wednesday 29th April 11:11

[9mm]

AyBee said:

9mm said:

akirk said:

You mention that the % growth is declining due to lack of your drive in growing the business / increasing competitors - that for me would be instant warning flags in terms of buying a business - if I came to talk to you / did the DD / understood who was working for you as associates - what would be the block to stop me from setting up my own business / tempting your associates away / competing...?

i.e. what are you really selling - an ongoing concern for someone one wishing to not start from scratch, or something which I need to run a successful version of your business (client base / IP / process systems / etc.) which have a value where it makes more sense to buy than to reinvent?

if it is so simple to run, could you not just get someone local in to run it for you?

I think all businesses experience a slowdown in growth at some point. There are many reasons but the warning flags can also represent opportunities. This business works in a highly specialised field where it enjoys a great reputation with loyal customers, repeat business and recommendations. It would be quite easy and cheap to broaden its service using the existing customer base. So my lack of interest in doing it is equally a big opportunity for a new owner.

If you stick with my example of someone acting as agent for a national chain of regionally based debt collectors, with me doing some debt collecting but thinking of purely acting as agent, the blocks to stop you competing/tempting my associates away are obvious and not really any different. The problem for an existing competitor is that you will have to dramatically erode your existing profit margin as I pay my associates at least four or five times what they pay. So, as an existing debt collector, earning say £100 for a job, why on earth would you leave for £150 a job or even £300 a job, and leave someone who has provided you with all those £500 jobs for six years? Would you even leave for £500 a job - on a promise rather than six years of track record? These figures are all notional. If you want to set up in competition you will have to set up locally and hope to grow or regionally with an immediate team. Where will that team come from unless you immediately offer more than I do? I think if any of this was going to happen, I'd have seen evidence by now.

The reason that competitors exist is quite simple. They aren't as good and some customers are happy to pay less for an inferior service/product. Just as they are in the case of cars, airline travel, FX, watches, vets or hifi. I position this business as the best in the market, pay the best rates in the market but don't charge ludicrous fees. That's because the position in the market, associate loyalty and longevity are more important to me that squeezing every last drop of profit out of the business. Competitors come and mostly go.

So to answer your question, what I'm selling is a ready made income stream with the potential for growth, that can be run out of your spare bedroom for six or seven hours a week and gross you a minimum of £50K a year. I could indeed pay someone minimum wage to take care of the admin but I'd always pay someone a lot more because that would be in line with the way I treat my associates. This might be a problem for a purchaser who wants to increase profits by reducing fees paid but I'd see that as rather stupid greed. You would instantly make it easier for competitors or new entrants to tempt the associates away or incentivise them to try and work independently. Better imo to not be greedy and keep everyone happy.

Sounds like a great business, I assume it once took a lot of effort to get it off the ground? I'm intrigued as to what it is.

Are the associates contracted to you? In the debt collector scenario, I'd assume they were free to pick and choose which jobs they take so there's actually nothing to stop them doing your jobs plus jobs from others but as long as you keep jobs coming in and keep having associates to do them because you pay them well, then that all works? How much of your work is farming out the jobs to associates and how much is trying to get new customers? Or do you sit still and it all comes to you?

Where are you actually based if you don't mind me asking?

There was hard work in the first couple of years when I set up systems, devised templates and established a customer base, market presence, etc but now those things are all in place it's just a question of fine adjustments and sailing the ship. As I do less providing of the service and switch to admin the workload and time demand decreases.

Associates are not formally contracted to me but they work to a set of rules and they know that if those rules are breached the relationship will end. It has only happened twice and in both cases the consequences for them have been dramatic - a return to scratching around for crap money from the people that pay peanuts. That lesson isn't lost on the other associates. People might be tempted to replicate the model but you have to understand that what I give them is highly attractive - regular leads, prompt payment way more than they can earn elsewhere and no admin. The skills they need to do the job are not the same skills you need to provide them with that package so many are not remotely interested in 'running the business' and nor do they resent my take because they recognise I make life very easy for them.

They can take work from whatever source they like, including competitors but it's easy to see why they would rather do one job for me than four for a competitor. I like them to do jobs for competitors if I'm not using them as it only reinforces what a good deal they have with me. I don't need to do any 'active' marketing. I effectively sit still and the business comes to me via website, social media, recommendation and word of mouth. That's a consequence of six years' market presence and a customer base to go with it.

The business is national but I'm based in the south east. As with other work, there tends to be more in the south, but this business has customers all over the country and could be run from anywhere in the country. In fact, when I'm holiday abroad, it's run via a smartphone.

Edited by 9mm on Wednesday 29th April 11:50

[9mm]

Swings and roundabouts in terms of pros and cons as you know but I don't believe it would make a significant difference to the value of the business whatever the setup. Subject to things like thresholds, the status can always be changed.

[9mm]

bad company said:

Let's be honest here. I and others have advised ways of valuing the business. The op is really looking to sell to a PH'r reading the thread.

Am I wrong ?

Yes, completely.

[9mm]

akirk said:

It is difficult without knowing the details...
however there are I think some issues with how you describe it...

you apparently have no overheads or costs, so no barrier to entry for someone there...
you haven't tied your associates to you, so no barrier to entry there
you say that one of your selling points is the amount you pay, but if the figures work for you, they will also work for someone else
you say that your associates are loyal to you and when a couple misbehaved the consequences were dramatic... seems a bit OTT...
you say that others can't compete as associates want to use you as you pay more - maybe others are making more profit?

the difficulty is that I can't see what you are actually selling - other than the convenience of avoiding the startup process...
however balancing that against a purchase cost is an interesting debate - the lack of anything you are actually selling also means a lack of barrier to entry for someone else - so person A comes and buys the business, but possibly would have been better spending that money on starting their own / as incentives for associates / etc. - or person B comes andsets up in competition has person A lost a chunk of value in what they bought?

normally there is a reason for the purchase - IPR / customer base (and prefereably ongoing contracts) / brand & market share / assets / etc. it could simply be the time & cost barriers to entry which can be avoided... but if none of that exists, all you are buying is an income stream but it is volatile, with little to help retain that into the future... it doesn't mean that there is no value - but it certainly would reduce the value considerably...

definitely worth talking to some agents where you can discuss the actual details rather than a forum playing guessing games

That's a helpful post (I appreciate those from others too) and the bit in bold a reasonable analysis.

These helpful posts have helped me to clarify my thinking both in terms of value and the decision whether to sell or not.

Just to clarify a couple of points from your post:

The consequences were dramatic because the business relationship with me was terminated and that put them (back) in the position of needing to do four or five jobs to every one of mine. The terms of our relationship were explicit and they were clearly and deceitfully breached. In those circumstances there can be no second chances. I think it's helpful in many walks of life to be clear about what everyone can expect of each other and then to follow through when those agreements are breached.

It may be that others are making more profit but that's not my concern as long as I am making a comfortable (notional) £50K for the effort and time I'm putting in. In many ways I don't want to rock the boat and make more or I could become a threat resulting in all sorts of time consuming hassle and potentially lost business, say in the case of a price war type scenario.

[9mm]

akirk said:

desolate said:

I think he has already addressed what the business has:

It has a good reputation, an established database of clients requiring whatever service he does and a website that does well in natural searched without requiring pay per click.


So the business gets leads, intros them to other businesses to deal with and takes a cut. Fairly standard stuff.

It's worth buying to either secure the brand and the leads or to shortcut the need to SEO work (can be expensive and time consuming if you can't do it yourself) or to pay up front for click through to the website.

Either way - I would be considering paying someone to do the admin (even at £100 an hour there's good profit) and take the remainder as nil-input cash or (more probably) seek to control more associates and take more of the total spend on the product/serivce

Fair points - but nothing there which stops competitors, which the OP seems to think he has...
Agreed though, I would see much more value in keeping the business than he might get in selling it

This is my conclusion. Why sell something for the current annual income when that business has made several times that in the last six years and is likely to continue producing that annual income for the forseeable future. 'Employing' someone to take care of the admin and just take the money for as long as it lasts would seem to be the sensible approach unless something happens to change the status quo. If the income drys up, I just shut down, with no liabilities beyond HMRC.