Selling Your Business: Is now the right time to act?

THE recession may have dented merger and acquisition activity throughout the Midlands but the appetite for growth remains undiminished and for entrepreneurs looking to find a bargain now may be just the right time to buy.

All this week, TheBusinessDesk.com, in association with Coutts and Higgs & Sons, is looking at the pros and cons of selling a business and whether now is the right time to act.

Paul Emery, private banker for Coutts in Birmingham, said: “On the negative side, it’s a bad side to sell because valuations are down and the sale process can often be tortuous. It’s also a buyers’ market so vendors need to be aware of that.”

However, on the plus side, he said entrepreneurs may prosper because there are opportunities to acquire businesses at good prices, many of which could offer good prospects. He said it was also a good time for entrepreneurs to take cash from the table and use it to buy.

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Nick Taylor, head of corporate for law firm Higgs & Sons, said many foreign investors were currently viewing the UK as a safe haven when compared with the Eurozone and were looking to buy up British expertise and quality – and not just in manufacturing.

“On the bad side, it can take a long time to deliver a transaction and there is the danger of the seller taking his eye off the business during the process with the result that six months down the line, the business might not be performing as well.”

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       Mr Emery said business owners planning on selling their business also had to have the right exit strategy in place, including what they wanted to do once the process was complete.
       
“A lot of business owners will neglect what they want to do post-sale.

“This should be an important part of the process and they should not wait until the money is in the bank before they decide on what their next strategy is.

“They should start thinking about this 12 months ahead of the sale,” he said.

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