Selling Your Business - Will You be Prepared?

Around a quarter of small to medium sized business entrepreneurs are planning to sell their business in the next three years; yet almost half of these people have no real idea what their business is worth.

Research by the Tenon Forum think tank shows that 47% of owners looking to sell do not have a clear idea of the value of their business, with many smaller owners overestimating the sale value. Only 48% of SMEs had an exit strategy in place, despite the clear benefits of having such a strategy.

Ian Beswick, Director of Corporate Finance at Tenon comments: "It’s not surprising to see how many entrepreneurs are thinking of selling up. Optimism in the retail, leisure, manufacturing and transport sectors is falling and this correlates with those businesses that tell us they’re thinking of getting out before things get worse. Ultimately this isn’t good news for the UK economy."

"What is of concern is how many small businesses don’t have an accurate picture of what their assets are worth. This seriously impedes proper planning. We’ve found that many very small business owners have an unrealistically optimistic view of the sale value of their company."

"Most owner-managers start to think about selling between five to 10 years of operation. But in reality the best time to sell depends on the value of the business at the time, as well as other lifestyle considerations. Equally, in order to maximize the value of your business, it’s essential that you have a clearly thought through exit strategy. This typically requires two to three years planning and execution. Bottom line, most businesses are just not approaching sale sensibly."

posted by The Editor @ 10:22 AM