Talking Business: Sanderson Weatherall constructs expansion strategy
DESPITE an uncertain time for the property market, Sanderson Weatherall is expanding.
Managing partner Andrew Ellis meets Ian Briggs and Baker Tilly’s Paul Byrne and John Glossop and explains how the firm is getting the best out of its limited liability partnership.
SANDERSON Weatherall has not been immune to the economic turmoil that has enveloped businesses across the UK, admits Andrew Ellis.
But unlike many companies which have seen consolidation as key to survival, the surveyors and property consultants has taken stock, revised its business plan and expanded.
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SETTING up as a limited liability partnership (LLP) is easier than most company owners think, explains Baker Tilly’s John Glossop
– A limited liability partnership (LLP) is similar to a normal partnership, but it also offers reduced personal responsibility for business debts. – The members of an LLP normally share in both the responsibilities of running the business and the profits that it makes. – Exactly how the members’ rights and responsibilities are defined and divided depends on the LLP’s members agreement. – Any group of two or more people who want to set up a profit-making business together can form an LLP – An LLP must have at least two members, and at least two must be Designated Members. – An LLP must be registered with Companies House and each member in the LLP must also register separately with HMRC to get their own tax records set up. – The members – not the LLP – pay tax on income or gains. Unlike limited companies, LLPs are not generally liable for Corporation Tax. |
Sanderson Weatherall has recently launched an office in Bristol and has Birmingham firmly in its sights. The company has not ruled out further expansion when the time is right, with Scotland a possibility. Appointed earlier this year to his post, Mr Ellis is based in the firm’s Leeds office and has been with the business for 23 years. Since his appointment, the straight-talking Yorkshireman has been working to improve communications with staff and outline the company’s future strategy. Speaking to TheBusinessDesk.com in the second of a series of ‘Talking Business’ articles analysing business practices and entrepreneurialism, Mr Ellis, who is head of a six office practice, said: “We’ve said here’s what we’re doing as a business. We’ve opened in Bristol and we’re trying to show there are opportunities for our people.” Sanderson Weatherall was formed following the merger of Weatherall Green & Smith and Sanderson Townend & Gilbert in 2003. Previously run as a limited company, Sanderson Weatherall transferred to trade as a limited liability partnership in July 2009. Mr Ellis believes the LLP status has been instrumental in helping the business to plan ahead by improving cash flow and managing tax and National Insurance contributions more inteligently. These savings have been ploughed back into the business. Mr Ellis said Sanderson Weatherall was especially grateful to accountancy firm Baker Tilly for its advice on the advantages of being an LLP. “We don’t pay National Insurance contributions at the same rate,” says Mr Ellis. “It has almost eradicated our overdraft which previously was used to fund part of our work in progress. And those extra resources have been used to help grow the business. “We passed some of the benefits of the LLP to staff; the rest we invested in the business. It was a step change in these times we’re in. “I think it shows that the difference between being a corporate company and an LLP does have an effect. The firm is in a much better state and being an LLP is a major part of our growth plans. “We’ve performed well through a pretty difficult property market. We’ve always had growth plans but we’ve now brought them forward more quickly. “There are opportunities. We are really grateful to Baker Tilly for helping us with ours. We’re really determined to get the business growing.” Asked how Baker Tilly has assisted, Mr Ellis says: “They’ve helped guide our thinking. Ours is a people business. We provide a high quality professional service due largely to the experience and commitment of our staff. “At a time when our competitiors have been merging we have been able to show an alternative approach which allows us to retain and attract talented staff. Therefore we are very comfortable with our independence. Our LLP conversation has helped with that. “What we’re trying to do is become a national presence in the country but as an independent partnership which rewards us all.” Mr Ellis said the LLP model is being used to attract new staff members as Sanderson Weatherall looks to grow further. He said the ‘roadshows’ he has under taken at all the company’s offices have enabled him to explain the group’s plans to staff. “I’ve been asked how we will grow the business. And that’s by recruiting like-minded people who want to provide a high quality service and who want to share in the benefit. Being an independent LLP allows us to do that.” Sanderson Weatherall really accelerated its growth plans nine months ago with the decision to open in Bristol and look at Birmingham. Scotland could be next on the radar because of the amount of work already carried out there. Commenting on the market outlook, Mr Ellis said the company’s valuation, industrial and retail teams were very busy, reflecting wider activity levels. John Glossop, of Baker Tilly, said Sanderson Weatherall had “gone back to basics”. Mr Glossop said the change to LLP status gave Sanderson Weatherall “undoubted cash flow advantages that has enabled the business to grow despite the recession. It’s certainly given Sanderson Weatherall a better route of growth.” He added: “Apart from the absolute savings in cash terms the other thing is cash security. The LLP members pay tax at six month intervals. When you first set up an LLP you wind up with a 20 month period where you don’t pay tax on the self-assessment system.”
Mr Glossop advises taking tax from a members profit share and putting it aside so that the resources to make the payment are there when the tax is due. “If you work in a private practice you make what you want of being an LLP,” concludes Mr Ellis. “If as a business you’re doing a good job clients will come back. It’s not rocket science.” Also in this series: LLP offers welcome prospects for Welcom Software More articles in
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Paul Byrne (pictured right), office managing partner at Baker Tilly in Leeds, said: “The risk for the same employees that are now members is that it’s their liability. Good housekeeping is an essential part of the business. Baker Tilly advised Sanderson Weatherall how to do this.”