Despite the recession and the general shortage of credit, now may be a great time to be buying a small business of £5m or less T/o. The potential is there for significant returns on investment as a small purchase offers a higher level of flexibility and control. Buyers with cash are in strong demand as a potential seller doesn't have to worry about the bank getting cold feet at the last minute. Having said that, banks are still open to financing deals in the £2m-£5m deal range as long as there is a sizeable chunk of cash being put into the deal.
During a particularly high-risk period, such as a recession, seeking a small firm with a strong management team can prove a safer option than buying or investing in a large business. Banks claim that risk management is often lacking in larger firms and attention from the media and constant market scrutiny can result in large firms suffering from fluctuations in their reputations.
Buying an unlisted, smaller firm, affords a much greater level of transparency for the purchaser and more opportunity for control over a company's operations. Furthermore, taking on a smaller firm puts purchasers in a better position to buck a trend in a tough economic climate. This may be because a large business can be very complex and less able to adapt to sudden changes in market conditions.
Indeed, building a portfolio of smaller, unlisted firms with a longer-term view, can reap benefits during a recession. This is particularly applicable if buyers are willing to put the work in to develop and expand their new purchases. However, do not spread yourself too thinly and make sure that you are buying businesses in an industry that you are familiar with.
If you are looking to raise additional finance, either through bank loans or private equity backing ,you will need to demonstrate strong leadership and team building skills along with a clear strategic vision for the businesses that you are looking to buy.
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This is a rare opportunity to acquire this thriving motor vehicle repair, MOT, and service centre. This professionally run business currently provides the majority of its services to private customers with a small amount of commercial work, which pro...
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