Businesses Likely to Sell Well in 2025
2025 will no doubt present its challenges for business and in particular the fortunes of SME businesses and their owners, whether due to the government’s domestic policies or world events. This said, there have been significant challenges for business owners pretty much every year. Can you remember a year since 2008, a few years after Hornblower started, that hasn’t presented its challenges?
As always certain business sectors are well positioned to ride the wave and are poised for growth, particularly those that align with emerging trends and economic demands, for example, IT security, infrastructure and sectors where the government has committed to invest.
Here are some insights into businesses that may thrive:
Key Traits of Successful Businesses
- Niche Markets: Operating in specialised areas with high barriers to entry protects businesses from competition.
- Recurring Revenue: Businesses with subscription models or service contracts tend to have stable cash flow.
- Maintainable Profit Margins: Solid, maintainable profits are attractive to buyers, indicating a healthy business.
- Growth Potential: Opportunities for expansion can enhance a business's appeal.
Promising Sectors for 2025
- Cybersecurity and IT Managed Services: With increasing digital threats, businesses in this sector are essential and in high demand.
- Logistics and Distribution: E-commerce growth continues to drive the need for efficient logistics solutions.
- Precision Engineering: Particularly in medical and food processing, but increasingly electronics and aerospace again too, this sector supports critical industries.
- Facilities Management: Services related to security, fire systems, and cleaning are essential for maintaining operational standards.
- HVAC Maintenance: As climate control becomes more critical, maintenance services are increasingly important.
- Software Development and SaaS: The ongoing digital transformation ensures a strong demand for innovative software solutions.
Impact of the Budget
Upcoming changes to the tax regime announced in the Budget, particularly the increase in Capital Gains Tax (CGT) and the reduction in Business Asset Disposal Relief (BADR), may cause business owners to reflect on the timing of their exit. The increases to employers NI will likely influence the cost of employing staff, as will the increases to the minimum wage for businesses who employ lower skilled staff. Higher taxes can strain business resources, potentially leading to reduced hiring or wage stagnation, which may affect overall economic growth as consumer spending declines.
However, it's crucial to remember that tax considerations should not dictate business decisions. A strong operational foundation and a clear growth strategy can help mitigate the impacts of tax fluctuations, allowing you to sustain and potentially enhance your business value in the long term.
Conclusion
Good businesses with solid returns and a positive outlook will always attract buyers. Preparing for an exit while the business is thriving can maximise value. With hundreds of active buyers on our database, we consistently receive at least 50 inquiries for each business we market in these sectors.
If you're unsure whether now is the right time to sell your business, talk to us now!
We are always happy to offer advice on valuation, performance metrics, and the various options for exiting your business. Selling while you are still successful and enjoying it is often the best strategy.
