Category: Global M&A news | Preparing to sell a business
Wed 12th December 2012
The festive season at the end of another year is often a time when business owners take their heads out of day to day operations and reflect on their future, both personally and for the business.
For some this will mean planning their retirement or simply deciding to change course and finally focus on that new business idea or project which really inspires them.
So will 2013 be a good time to sell your business?
Whilst there are certainly positive signs in the economy for 2013, the road ahead still appears uncertain.
However when it comes to sales, mergers and acquisitions in the SME market, there are certain factors that hold true whatever the future holds:
- There are numerous active buyers with funds available to acquire businesses.
- Such buyers are less reliant on bank lending and are still looking for better investment returns than cash and property.
- Banks are lending albeit within certain limits and are still under pressure to do so.
- For international buyers the relatively weak pound still presents an opportunity.
- Good businesses with sound returns will always sell well. It is best to sell while you are still successful and enjoying it.
Which businesses will sell well in 2013?
Businesses which sell well typically have the same traits, they:
- Operate in a niche market with strong barriers to entry
- Have consistent recurring revenue, with clients often locked in by a service contract
- Have strong profit margins
- Demonstrate tangible growth and opportunities to expand
Such businesses include the sectors listed below. This is proven by the acquisitive demand for such businesses that we have seen over the last year or so.
- Precision engineering for aerospace, automotive, oil&gas and food processing markets
- IT support
- Document scanning
- Archive storage/record management/printing
- Lettings and block management
- Accountancy practices
We have hundreds of active buyers on our database and consistently receive at least 70 enquiries for each business we market in these sectors.
Do you have a business in one of these sectors?
At Hornblower, we like to start dialogue with our clients 2 to 5 years in advance of when you are looking to selling. We are always happy to offer advice on valuation and what performance metrics you need in order to achieve your desired deal value, as well as offer general advice on the various options for exiting your business.