2017 will be a year that thousands of owners take the decision to finally leave their businesses behind and head to pastures new. Many will sell, others will transfer their company to a family member, a few will take the decision to simply close the doors and sell off the assets.
The reasons for selling a business are often a lot more varied. Here are just 5 that owners could, even now, be entertaining as we head into the New Year.
Tired of the business
There are a good few owners who have been running their business for years, building it from nothing and making it a success. They have come to that stage in their life where it just isn’t fun anymore.
Business owners are under immense pressure from legislation concerning employment, new workplace pension provisions for their staff, health and safety issues, and a range of different and sometimes costly contracts with suppliers and customers alike. All of this has undoubtedly made running a business more difficult in recent years.
Others are tired of managing people. As one owner told me recently, he often felt like a company counsellor rather than a business leader. There’s no doubt that running a business can take its toll – most entrepreneurs know when it’s time to step aside.
This is the year they planned to step back from the business and do something different. For some it will be because they are approaching 65. Others will be in their 30s, 40s or 50s, a good way off from retirement. They have set their goal, though, and agreed with their love ones that they should start the ball rolling with their exit strategy and retire early.
You may ask why someone would want to step back so early. The reason is simple: they can! Money rich, time poor is often the mantra I hear from successful businessmen. Owners are set up financially after building a great business and recognise they can save money but they can’t save time. There are a lot of other things to do and a life to enjoy.
The business has outgrown them
We regularly meet business owners who are humble enough to admit that their business has grown to such a size that they are no longer the right people to lead it going forward. They recognise the business needs to be part of a larger organisation that will bring leadership, synergies they can’t provide on their own, vital finances to support and maximise future potential, and benefit the staff who work there.
An approach from a third party
Many owners during 2017 will get unsolicited approaches from acquirers who are on a buy and build strategy and see this or that business as a good opportunity for their portfolio.
We are seeing a significant increase in business owners who have been approached by a potential buyer in this way. Most recognise that, if they want to maximise the value of their business, they must ensure they have more than one potential buyer. With increasing interest, it becomes easier to get the deal they want and one which benefits the business in the long-term.
Recognising now is a good time to sell to an international buyer
Now is highly pertinent because there is plenty of interest from overseas buyers. Advisers across a range of sectors are reporting an increased interest from international buyers who are taking advantage of the significant decline in the pound during 2016. Looking to buy UK businesses in this climate makes sense.
Many companies who export have seen a significant rise in sales because of the drop in the pound. There are some good deals out there to be had if you get the right advice on selling.
Recognising the right time to sell your business, of course, isn’t always easy. When you are engrossed in the everyday running of your company, it can be easy to miss the vital signs that get you top dollar for any sale. The importance of positioning your business to make it more attractive to buyers, whether they are from overseas or homegrown, as well as safeguarding it for your loyal employees.
As a business owner myself, I am sure a number of these reasons will resonate with you. If you are considering selling your business in 2017, you need to make sure how ready your business is. Ideally, you want to be in the position to maximise value and sell in the quickest possible time. The best way to ensure this is the right moment is by having an exit review with a reputable adviser who has good process to help you evaluate where are and where you need to be.
Wishing you a prosperous 2017
If you would like to find out more about selling your company why not attend one of our free seminars or call us on 0845 0678 678