Timing is important. Like most other things in the business world the value of businesses for sale is influenced by the state of the economy.
The credit crunch had relatively little immediate effect on the number of SME businesses for sale or on the number of potential buyers, though we now see owners deferring the sale of their company whilst they trade on and improve the financial status of their businesses. Others are going to the market overpriced in the hope of achieving a sale.What the credit crunch did affect and continues to affect is the willingness of banks to fund deals, and inevitably the market has slowed.
That said there are an increasing number of cash rich businesses with a renewed interest in buying businesses. Whilst some of these cash rich companies have realised there is an opportunity to take advantage of the situation and are bargain hunting there are plenty who are paying fair prices. This is particularly true of companies that want to break into, or increase their penetration into fast growing sectors such as sustainable energy.
The judgement that owners have to make is balancing cash today against the prospect of making more in the future, and how long their will need trade on to achieve the selling price they aspire to.
Different industries will always be at different points on the economic cycle. Some businesses will enter a recession before others, but will come out sooner. Similarly, some businesses will feel the effects more keenly than others.
Don’t believe everything you read. For example, the media would have us believe that manufacturing is dead in this country, and that everything is made in India and China. Yet we know that though much of our heavy industry has disappeared, there are lots of highly skilled and well resourced companies making high added value products here in the UK, and plenty of entrepreneurs looking to buy them.
Based on long experience we can give you an honest view of how saleable your business is in the present marketplace.
Contact us now for an honest assessment of your business.