Growth, business confidence and the right time to sell
On the day the Bank Of England announced its much-predicted rise in the base rate, we met with a range of business owners and professionals for a highly enjoyable Q&A event: When is the right time to sell your business? run at the London office of Penningtons Manches LLP.
Judging by the questions asked by business owners – and the results of the live surveys we conducted – the November 2 session was the clearest indicator yet that business owners are acutely aware of key pressure points in the current market. We all know the uncontrollable variables: Brexit negotiations, rate rises, forthcoming GDPR regulations and a weaker sterling. With rumoured changes to the Enterprise Investment Scheme, pensions and stamp duty, the Chancellor’s Autumn Budget on November 22 will no doubt be watched keenly by everyone in business.
The key takeaway, however, was positive. While business owners have some macroeconomic reservations, they remain positive about the prospects for their own companies. Our survey data reflected this: only 2.6% of attendees were ‘very confident’ about growth in the UK economy over the next 12 months. Fascinatingly, however, 44% felt ‘very confident’ about growth in their own business in the same period, with a further 39% expressing they were ‘confident’. In the words of our Insight Manager Rachael Elliott, who conducted the polling, “Business owners remain bullish about their own companies, because that’s growth they can control.”
There were two other revealing statistics from the night. Attendees’ primary concerns when it comes to a company sale are 'getting the right price' and 'selling at the wrong time'. On these issues, our panel of entrepreneurs Rob and Alisa Miller (who sold healthcare comms business PCM Healthcare) and Jon Neill (who recently sold a majority stake in his sports equipment business Sportsafe) were able to field a series of questions. They discussed changes in their market, their personal and commercial motivations for sale, and shared their experiences of negotiating with UK and international buyers during their competitive sale process. Technical advice from Penningtons Manches corporate partner David Kendall and BCMS’ Jonathan Dunn explored other important topics: earn outs, company restructuring, due diligence and current market trends.
So when is the right time to sell? The overriding theme of the evening was clear: attending business owners at all stages of the business lifecycle are assessing their investment, growth and acquisition options with greater urgency than perhaps ever before. With a strong market for business sales across multiple sectors, and sustained interest in UK businesses from home and abroad, they’re right to do so.