Now Is The Time To Sell Owner Managed Businesses

Published: January 30, 2012

Economic climate is no excuse not to cash in


Right now could be the perfect time for people to sell their businesses.  Our experience in the UK market can be evidenced in the wider world.

Whether you are looking to retire from trading and cash in, or even just thinking about moving on to something new, the current economic climate need not be as intimidating as it may appear.

2012 could be the perfect time for those looking to sell their businesses.

You have to consider this within the context of the last four years.  It was 2008 when the recession started and it was financial meltdown.

Prior to that, people in the UK were lining up to sell their businesses because money was easy to borrow for buyers and the queue of sellers was filled with people starting to reach their 60s and looking to cash in and head to the beach for retirement.

Then, values of the typical owner-managed business dropped by up to a half because there were no funds available for people to buy them and everyone became risk averse. 

Consequently, people decided not to sell because their business used to be worth more than they were at that point and decided they would try and wait it out; however business owners are starting to recognise that their companies are unlikely to get back to their previous values for years.  Those looking to retire are now another four years older, so are recognising that there is no point in holding out on any longer.  Life’s too short!

If a business has survived the last four years, it probably is quite saleable anyway because it has demonstrated a resilience and robustness.  It has weathered the worst business storm in our lifetime.

Ultimately, the value of any business at any time is what someone is willing to pay.  Right now, there are a lot of cash rich trade buyers in the market around the world.  The world is becoming a smaller place and buyers from India and China are keen to snap up good opportunities.

Also, quoted companies and venture capitalists want their cash invested into businesses where they might earn a decent return....more than they will achieve by having cash on deposit.

It is not difficult to find the buyers at the moment, so long as the vendors are realistic on price expectation and realistic on the structure of a deal.  There are buyers out there, if your business is performing well and your accounts are robust and reliable.

About the Author

A Chartered Accountant and holder of the Corporate Finance qualification, Mike has specialised in Corporate Finance for some 20 years. Initially as a senior partner of his own accounting firm, subsequently head of M&A with a top 10 accounting firm and as a director of the Corporate Finance arm of a quoted business advisory group.

Mike specialises in strategic advice to owner managers and the negotiation and structuring of acquisition and disposal transactions

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