Lack of Businesses Available to Satisfy Increasing Buyer Demand! (April 2010)

Lack of Businesses Available to Satisfy Increasing Buyer Demand! (April 2010)

Yes – it’s a fact. Increasing numbers of people are now wanting to buy businesses, especially in the industrial, commercial and services sectors. However, they are facing an acute shortage of quality businesses being offered for sale.

The reasons why prospective buyer numbers are rising are many and varied but some of the major influences are as follows:-

 

• Interest rates on savings are relatively very low and people are seeking to achieve a much better return on their capital.

   

• Investments in such as stocks and shares and pension funds, which have been somewhat volatile of late, and bricks and mortar which appear to be again heading to uncertain territory are causing a lot of people to seek alternative investment vehicles and many are considering businesses over which they can have at least some degree of control.

   

• Unemployment has risen significantly during the last two years – especially in the financial services sector – and this is causing people, particularly professionals and middle managers (with transferable skills appropriate for the management of their own businesses), to want to be in charge of their own destiny rather than seek re-employment. The acquisition of a business appeals greatly to people in this group.

   

• Individuals with aspirations to own a business have come to realise that in the present market it’s much easier to arrange commercial finance to buy a good going-concern business than to raise money for a new venture. In fact, for the majority of lenders there continues to be virtually no change compared with recent years in their willingness to lend and the criteria they employ in making lending decisions where quality applicants and good, profitable businesses are concerned. Some lenders are actually actively seeking commercial finance business at this time!

At Beardsley Theobalds we have seen buyer enquiries rise significantly in recent months but the demand is not being met by business owners wishing to sell. Why? We believe that most business owners, faced with all the doom and gloom they have regularly been fed with by the media of late, has caused those who would like to sell to think that this must be a bad time to put a business on the market. Nothing could be further from the truth as far as we are concerned – quality businesses are selling fairly quickly and it’s not unusual for bidding wars to occur in respect of some businesses which leads to prices above the marketing price being achieved! During the last twelve months we have experienced several instances of sales being agreed within weeks of businesses being made available and over 70% of these achieved prices in excess of the marketing price. Furthermore, prices being achieved are no lower than was the case prior to the economic downturn.

The message is therefore very clear. If you want to sell your business there is absolutely no sense in waiting.

If you are thinking about selling your business we invite you to have a look at the video on our website (www.beardsleytheobalds.co.uk) where one of our directors offers tips, help and advice.

Roger Mundy, Managing Director, Beardsley Theobalds