Majority of North West SME owners plan to sell their companies, says study

More than half of North West SME owners are planning to sell their business, according to new data.

Research from Bury-based Clough & Willis found that 65% of SME bosses intend to exit their company within the next five years.

To conduct the survey, the law firm approached 450 businesses across the region in sectors such as retail, construction, manufacturing, financial services, engineering, transport, property and agriculture.

Clough & Willis also sought to determine whether or not North West SME owners know what steps they should be taking in preparation and how long the process takes.

While 65% of respondents plan to sell their business and believe they know its true market value, only 45% reported seeking professional advice to determine that figure. Of the owners planning to sell, fewer than half (48%) were confident of selling at the price they want.

When quizzed on the type of sale, 87% expect to conduct a trade sale and 13% a management buyout (MBO).

In terms of understanding the process of selling a company, 30% of those questioned said they don’t know the steps to take.

Wide estimates were given for the length of time it usually takes to prepare an SME for a trade sale or MBO, with 20% claiming under six months and 30% up to five years.

Clough & Willis’ final question asked whether or not Britain’s decision to leave the European Union had made them reconsider their plans to sell. Of the 65% who intend to sell, 90% said Brexit would make little or no difference. Around a third said it could cause them to postpone.

Guy Lachlan, a corporate lawyer at Clough & Willis, commented: “The findings of this survey are fascinating as they show there is still confidence and optimism in the marketplace amongst business owners despite the uncertainties as to how Brexit will unfold.

“In a survey from March this year the Institute of Chartered Accountants in England and Wales reported that 60% of small business owners would vote to remain in the EU.”

He continued: “Yet already that figure is translating into an overwhelming 90% of those who are intending to sell who now believe that Brexit will not affect their exit other than perhaps some extension of the time frame.

“The key for any business owner who is looking to sell is thorough reviews of all areas of their business before inviting approaches from potential buyers.”

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