To sell or not to sell, that is the question

Tuesday 29th January 2019

Since late 2017 there has been a general reduction in the number of businesses coming onto the market. It is generally understood that business owners, who in principle would like to sell, are demonstrating a reluctance to commit to taking the necessary decision to do so at this time. They have been citing all sorts of reasons for this, including the current state of the economy (national and global), geopolitical issues and, in particular, the uncertainties surrounding Brexit, but the underlying rationale appears to be based on the premise that it’s easier for them to defer the matter rather than to make a decision which they do not necessarily have to at this point in time! This may be somewhat understandable, but to simply defer making a decision to sell may in time prove to have been entirely the wrong course of action. This assertion is made because there is currently good demand for quality businesses but relatively few available, especially in certain sectors. This situation, of course, serves only to improve the prospects for serious sellers, both in terms of sale timescales and prices achieved. However, if all of those business owners who are currently delaying offering their businesses for sale until such as a significant improvement occurs in the economy and clarity as far as Brexit is concerned, they may have quite a long wait! Moreover, for those who want to sell in order to retire or for health reasons etc. and would like to be free from work and improve the quality of their lives, a deferment obviously runs counter to such underlying desires. However, the main cause for concern among these business owners should be the potential danger that when they eventually deem that circumstances have improved sufficiently to encourage them to make their move, it is likely that this could produce a situation whereby a lot of businesses will be offered for sale at the same time. Consequently, supply could well outstrip demand at that time and may well result in lower prices and longer sale timeframes for most vendors.

Roger Mundy, the Managing Director at Beardsley Theobalds (www.beardsleytheobalds.co.uk, roger@beardsleytheobalds.co.uk) – specialist business transfer agents – who wrote this article says the answer to the question in the headline above is that would-be sellers would therefore be well advised to reflect on the prospect of such a scenario which perhaps may cause them to consider selling their businesses sooner rather than later!