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£5 notes, £1 coins… and the best time to sell?

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We’ve all been using those crisp, holographic fivers for a while. Chances are you’ve had a few of those nice new 12-sided £1 coins, too… apparently the most secure coin in the world.

Time is running out to exchange the old versions. The old five pound note ceases to be legal tender next week, on May 5. You’ve got until October 15 to exchange the round £1 coin. After then, they will be technically worthless, just like the old 50ps, 10ps, halfpennies and – for older readers - shillings and sixpences before them.

This got me thinking about business sales, and our marketplace. Some business have a peak value – for example, when customer orders or contracts are at their most desirable, when systems and infrastructure are leading-edge, or when the product or service you sell is in in most demand.

Then – sometimes overnight – the game changes. This could be due to a new piece of legislation, brand-new competitor product, or fundamental shift in the market. Suddenly, some business owners are playing catch-up, and their strong position is eroded.

This is not good news if you’re thinking of selling a business. Acquirers and investors are risk averse and want some element of a future-proofing. They want to acquire companies with potential to grow, to take the next step change. Fairly obviously, a company with a limited shelf life, trading on its legacy, is likely to be less attractive.

I’m not scaremongering, and I’m not saying “it’s now or never”. But 2017 is still a strong market for business sales, with multiple factors benefitting acquisition, including access to funding, low interest rates, strong balance sheets, and a weaker pound.  With a general election looming, the uncertainty over Brexit and UK plc’s position in the global economy, this environment may not last.

I do know this: now is a good time to explore your options. Take some time to plan your next steps, look at your business objectively. And, if you forgive the comparison, make sure your company is more polymer £5 than old round pound.

BCMS offers confidential 1-2-1 meetings for business owners exploring their sale options. Click here for more information

Dave Rebbettes's picture
Posted Apr 2017
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