Why you could be too close to your business to see its true value
“I’ve got nothing to sell, and nothing to pass on.”
These are the words of a business owner we talked to this week. He was utterly convinced that his business – niche though it was – had no intrinsic value to anyone but himself. He felt (and I quote) that it was a “waste of time” contacting potential acquirers, because no-one would be interested. He was just going to close it down.
What makes a business owner feel this way? It’s a combination of factors, of course. Red tape, staffing issues, business admin, management accounts, lack of marketing budget. All of these can have a negative impact on a business owner’s working life, and, by extension, his (or her) perception of his business.
But where you see problems, others may sense an opportunity.
Our experience is that some clients can seriously undervalue the true worth of all the assets in their business, and I don’t just mean property, equipment, or materials. Your customer base, key contracts, staff, processes or intellectual property have a value. Your relationships, your positioning in the marketplace, even your geographical location… these may be just what an acquirer is looking for.
And make no mistake, acquirers are looking. In the last year alone 661 organisations revealed their acquisition criteria to BCMS, in over 40 different sectors. And amongst those looking for businesses in engineering and IT, there are those with highly specific requirements: targeting companies in niche areas such as water treatment, giftware and translation services.
Add that to the thousands of companies we actively profile each week, and the 35,000 conversations we have with acquiring companies each year, internationally, and you can see the extent of the potential marketplace for your company. In the last week, in the UK alone we’ve sold companies in social care, consultancy, and construction.
Don’t underestimate your business. Take a step back, and look again at the market where you operate, your key products and services, and why your customers buy from you, and keep buying.
And then, by all means, tell me you’ve got nothing to sell.