We are seeing more private businesses appear on the market again after a short lull. One of the reasons for this is that in the lead-up to the recent Budget there were rumours about that the government may have been about to kick the very useful Entrepreneurs’ Relief into touch. Heaven forbid!
This prompted more than a few concerned business owners to cash their chips before D-Day.
There were also a few Smart Alecs winding down their profitable companies in order to extract the cash reserves at 10 per cent before the March Budget put a stop to it, through a change in the small print.
Following the Budget, it’s taken a while for the deal stream to get flowing again, but we are definitely back to business as usual.
There’s some uncertainty about the future in many industries, mostly down to Brexit angst. This can be useful in negotiation leverage by purchasers - who knows whether past profits can be repeated in this unsettled climate etc.
The two choices
Not everyone is interested in growing their business. Of those that do, many fail, or have businesses that just don’t scale. The rest have two choices: grow organically or grow by acquisition.
Both of these strategies need resources. It’s taken as read that there is a growth mindset in place and someone passionate about building the company.
Laura Tenison, founder of JoJo Maman Bébé, the mother and baby specialist, is one of those people. “Re-investing in the business and not taking money out for the first 18 years was key to my success”, says Laura. She has 70 stores now in the UK and hundreds of trade customers abroad.
But growing a small business into a large or even mid-range business not only takes time, it is very hard to do. Most people fail - the stats don’t lie.
Here at the Business Sale Report we see more of those entrepreneurs who prefer the fast track route to expansion. Instead of time they need money - capital - often lots of it. When the deal makes sense and there is astute cash management in place, getting the funds doesn’t need to be a problem it can sometimes seem at the outset.
Asset-based lending, bank finance, venture capital, peer-to-peer lending and vendor finance are all options that are being used every day by business buyers. We separate the fact from fiction on navigating the funding channels in our subscriber resources section.
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