Whether they’re looking to spend precious time with family, have reevaluated life goals due to the pandemic or are looking ahead to a good retirement, many business owners are worried they will not be able to sell their businesses because of the impact of Covid-19 on the economy.
Tim Peters, broker at Business Partnership Peterborough and Leicester, wants to combat those misguided assumptions – those contemplating exiting their business via a sale don't have to put their plans on hold.
Investors with capital are always looking for opportunities, no matter what is happening with the economy. Foreign buyers are also still active in the UK, despite ongoing uncertainty because of Brexit – sterling remains weak, giving UK businesses additional appeal among buyers.
There has been a solid demand for businesses which have shown themselves to be ‘Covid-proof’ – in sectors such as technology, automation and security, but also green shoots for struggling sectors such as hospitality.
Tim believes the pandemic has made lots of business owners evaluate what is important to them.
He said: "The main impact of Covid-19 on the market has been prompted by uncertainty which has made people want to take charge of their own destiny. This has brought buyers to the table who weren’t there before - those who had never even considered running their own business.
"For these people, buying an existing business appeals because it is less risky than starting a business from scratch. It becomes even more appealing as they also have an existing customer base to immediately trade from.
"We’re predicting the market will return to pre-Covid levels in terms of business sales confidence by the autumn, so I’m expecting to support a number of successful sales before the end of year."
Preparing to exit a business might seem like it is the end but Tim believes it is important for business owners to realise that for whoever is taking over, it’s the beginning.
A business needs to be scalable enough to demonstrate a viable future and knowing growth potential adds value to a business for potential buyers. Importantly, this shows buyers that an owner’s involvement in the company has not been focused solely on the immediate performance, but also on the long-term goals.
Tim added: "Business owners have to think about how they would answer questions that a potential buyer might ask.
"For example, what is the future potential of your business? What are your major competitors doing that you’re not? Be prepared to share your knowledge and understanding of the opportunities that exist within your sector and how they impact your business.
"The time that you choose to sell your business is vital. On one hand, you need to be aware of how your business has grown and what its current vulnerabilities are resulting from this.
"On the other, you want to ensure that you have built sufficient value in your business to sell it at the best possible price. Business owners, whether serial entrepreneurs or would-be retirees, should always be looking at exiting their investment because this is intelligent business thinking."
During the pandemic, Tim has had to adapt his usual day-to-day practices. He has had to be more flexible in interactions with potential buyers, offering socially distanced viewings to ensure everyone could stay safe. But even with the impact of Covid-19, there has still been significant interest from a wide range of buyers.
To find out more about Business Partnership Peterborough and Leicester, or to get a free business valuation, visit business-partnership.com.