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Archive for the ‘Trends’ Category

Survey of pub sales reveals large increase in freehouse deals

Thursday, January 5th, 2017
Green Man Pub
The volume of operational freehouse pub sales has shot up by 150 per cent in the last year, whilst bottom-end pub sales are down by 28 per cent.

This is according to the annual ‘Survey of Pub Sales’ carried out by leisure property specialists Fleurets. The survey revealed the stability of the pub sales market in general, which is surprising considering the political, regulatory and economic turbulence over the past twelve months.

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Residential care activities insolvencies up 23 per cent

Thursday, May 5th, 2016

Some interesting analysis on the residential care home market has been carried out by FRP Advisory.

Running against a general cross-industry trend of declining corporate insolvencies, the care home sector has been going through a very rough patch with insolvencies up 23% year on year. We are looking at a staggering 24-fold rise since 2010.

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So long and farewell: The five biggest names to leave UK high streets since 2013

Friday, November 7th, 2014

It has been a strange six years for the retail industry.

When the economic recession hit and consumers tightened the proverbial purse strings, there were few sectors that felt the pinch quite as much as retail. However, as the economy improves and people begin to splash the cash once again, it still has not been smooth sailing for high street shops, with many succumbing to financial pressures and going out of existence.

The truth is that the industry has changed; it is a well-known fact that people are increasingly going online to buy their goods, making bricks and mortar stores at even greater risk of falling into financial distress. Indeed, the result has been devastating for some retailers, with major UK brands crumbling by the wayside as Britain marches down its road to recovery.

So, with all that being said, here is a look at five of the most high profile retail casualties from the past two years.

Floors-2-Go

The flooring company fell on hard times earlier this year and, for the third time since 2008, administrators were called in to try and find a buyer for the business. The family-owned firm looked like it might get a reprieve when a deal was touted with the Chinese company Nature Floor, but this never materialised and talks were eventually abandoned over the summer.

Jane Norman

The women’s clothing chain, which is owned by The Edinburgh Woollen Mill Group, is the sister company of another fashion chain Peacocks. It entered administration for the second time on 26 June 2014, having suffered the same fate almost exactly three years earlier (on 27 June 2011).

Despite closing stores and streamlining its operations, Jane Norman could not make the numbers add up and its parent company decided the time had come to close the fashion house down. It still trades online but has no high street presence.

Phones 4U

The mobile phone seller came unstuck in quite different circumstances to the first two retailers on the list; it was not the loss of sales to online competitors that did it for Phones 4U, it was the fact that it lost big contracts with two major operators.

Earlier this year the firm failed to renegotiate deals with EE and Vodafone – but both telecoms businesses were quick to capitalise when, having entered administration, they snapped up some of Phones 4U’s high street shops.

Blockbuster

Cheap DVDs, online sales, downloads, streaming… you didn’t need to own a crystal ball to know that Blockbuster’s days were numbered. It remains a golden example of businesses’ need to respond to market demands and adapt to the times – as the company failed to evolve apace with the trend of buying and watching films online its closure quickly became a question of when, not if.

The iconic stores disappeared from British high streets towards the end of 2013 and it is estimated that the collapse cost the taxpayer around £7 million.

La Senza

Finally, completing the list, we have the lingerie business La Senza. Attempts to find a buyer for the fashion retailer failed and it entered administration earlier this year.

The company, which was owned by serial entrepreneur Theo Paphitis, formerly of BBC show Dragons’ Den, still has more than 300 stores around the world but its presence is set to diminish on the UK’s high streets after administrators PwC confirmed they would be closing all remaining British shops.

Big data: What's all the fuss about?

Thursday, October 30th, 2014

Big data: it’s a term that almost everyone will have heard of, but why should business buyers take note?

To start with a brief definition, this latest technology buzz phrase relates to the exponential growth in the amount of data that is being generated, stored and analysed. Both individuals and everyday devices leave behind a data trail, which is becoming a gold mine for both private and public sector organisations – cheaper storage solutions and the availability of greater compute power via the cloud means that these massive data sets, which were previously too large to make sense of, can now be dissected and transformed into valuable insights.

For business buyers, it would be foolish to ignore a technological trend that is transforming the IT and digital world, especially as it is promising huge opportunities for those able to capitalise on it. Indeed, it is predicted that the global big data market will be 44 times larger in 2020 than it was in 2009. Furthermore, it has been said that big data could be worth £216 million to the UK economy over the next five years.

As big data has established itself as a mainstream business technology over the past 24 months, there is massive demand for a wide variety of products and services that can turn petabytes into competitive advantage.

The most obvious area is data analytics. Importantly, not only are the tools for crunching numbers highly sought after, but the people who can do it are also on the wish-list of many businesses; the fabled ‘data scientist’ is to 2014 what the web developer was during the dotcom boom. This is the person who can take data and make sense of it to give a company competitive advantage.

Research shows that the economy has driven a need for 69,000 additional big data specialists over the period 2012-2017, with 60 per cent of businesses already struggling to hire people with data science skills. The point? If people cannot hire in-house experts to unlock the value that is sitting within huge data sets then they are going to look to employ the services of a company who can.

There are countless innovative start-ups that have created cloud-hosted software for analysing big data, many of which operate in the ‘Tech City’ area in east London. They can offer the platform for companies, with or without a data scientist, to analyse and visualise big data. Crucially, these technology solutions are often targeted at particular verticals.

For business buyers this points to big opportunities – whether already operating in the technology sector or providing services to sectors like retail, healthcare or financial services, obtaining big data capabilities through a merger or acquisition could open the door to huge profits.

It might be a competitive market but it is one that is guaranteed to grow over the coming years – the big data bandwagon is one that business buyers ought to consider jumping onto, and quickly.

If you are considering a making an acquisition this year, take a look at our latest businesses for sale to get an idea of medium sized businesses on the market.

Women starting a business more likely to feel ‘isolated’ than men

Wednesday, October 29th, 2014

Women are twice as likely to feel ‘isolated’ when starting up their own business than men, new research suggests.

A report by start-up accelerator initiative Entrepreneurial Spark acknowledged the challenging nature for anyone wanting to start up a business on their own, but uncovered key gender differences.

The report also found that 58 per cent of men were driven to start up a business so that they could be their own boss, while only 46 per cent of women saw this as the driving factor.

The research, which was carried out to mark the start of Accelerate Your Business Week, also highlighted that 31 per cent of women are driven into starting up a business after having a great idea, in comparison to just 19 per cent of men.

CEO of Entrepreneurial Spark Jim Duffy explained: “If we are truly going to create an entrepreneurial revival across the UK then it is not enough to rely on the individual.

"Almost 60 per cent of business owners told us there is not enough practical, free support and advice out there for people to start a business or grow an existing business. We know that it is tough in the start-up world and having the right support from an early stage hugely increases the chance of success.”

When it comes to the financial side of things, women came up on top, with only 14 per cent noting difficulties acquiring finance as their biggest challenge, as opposed to 20 per cent of male respondents.

Women were more likely to seek a mentor than men, according to the 59 per cent and 48 per cent respectively who saw seeking a mentor as helpful.

The report highlighted that with Christmas fast approaching, October is the best month to grow businesses and achieve yearly goals. If you have considered growing your business through acquisition but have not found the right business to buy, you should get in touch with our team, call 0208 875 0200.

Banks' lending to SMEs continues to hinder growth strategies

Wednesday, October 22nd, 2014

The economy might be improving but it is still apparent that SMEs are not seeing the full benefits of this, particularly those wishing to pursue faster, more aggressive growth strategies.

According to the Bank of England’s latest Trends in Lending report, the amount of money handed from major banks to small and medium sized businesses has fallen by £400 million in the last quarter. What’s more, the government’s Funding for Lending scheme (FLS) is also failing to benefit larger enterprises, with lending to these firms down £3.9 billion in the three months to the end of September 2014.

The government initiative was designed to help banks offer cheap loans to fuel growth among British businesses amid claims that lenders were reluctant to provide the funds many SMEs were after. The findings of this report suggest that the plan is failing.

The national chairman of the Federation of Small Businesses, John Allan, calls the figures, released on 20 October, "disappointing". He said: "Despite the economy strengthening and the price of credit easing over the past 12 months, these disappointing figures suggest the demand for finance from small businesses is not being met by supply from the banks.”

It is worrying sign that there is a lack of finance available to SMEs through established avenues. Instead these companies are increasingly have to turn to alternative lending options, such as crowdsourcing.

With the economy improving and confidence returning to the vast majority of sectors, businesses are increasingly looking to capitalise on market conditions by pushing for growth. Naturally, a popular approach is to grow inorganically – that is to say, to grow by acquiring other businesses. To do so, a company needs access to capital, which can be difficult to amass even if the business is performing well.

If banks remain unwilling to lends to SMEs – as the Bank of England’s report indicates they are – then they are placing a glass ceiling over the heads of these businesses looking to pursue more aggressive growth strategies.

Rising costs to SMEs stifling growth

Friday, October 10th, 2014

Running costs to small businesses are rising despite declining inflation, the Forum of Private Business (FPB) has revealed in its latest survey.

Over half (63 per cent) of all British businesses have experienced an overall rise in their costs, the results of the Cost of Doing Business survey showed. A high number of people reported increasing marketing costs (76 per cent), while rising energy costs was slightly lower at 70 per cent. Transport and staff costs were both at 65 per cent.

Annual inflation has fallen from 2.7 per cent to 1.6 per cent, but the increasing costs small companies are having to absorb are keeping them struggling with 81 per cent saying the rises have harmed their business.

Seventy-thee per cent of respondents flagged up cash flow difficulties as an impact of these costs adding up, and 63 per cent said it had restricted their growth.

So despite the improving economy, many businesses are rendered unable to harness growth and push forward with their plans for the future.

A massive 82 per cent of the business owners surveyed are expecting bills to continue to rise, with 16 per cent fearing large increases.

An infographic from FPB suggests that businesses focus on getting to grips with cash flow, plan for cost rises, hunt for savings and good deals, and search for alternative sources of finance.

Global M&As reach five-year high

Wednesday, October 1st, 2014

The number of worldwide business acquisitions in 2014 so far has topped the levels set in the past five years, with the M&A market now reaching pre-recession highs.

According to data from Thomson Reuters, in the first nine months of this year, the total value of global deals reached $2.66 trillion (£1.64 trillion). This is a massive 60 per cent rise in the figure at this point last year, with the number of M&As valued at $5 billion or more hitting a new high.

The figures are indicative of the growing confidence among business buyers; as the majority of industry sectors start to witness signs of sustained growth, people are more assured that they will see positive returns on their investments. However, particularly strong performances by the energy, technology and healthcare industries might be slightly distorting the overall level of M&As taking place.

Nevertheless, it is clear that the conditions for buying businesses are improving and the combination of increased capital and confidence within companies is leading them to explore avenues for inorganic growth. After five years of business people having to struggle to survive or settle for minimal, steady growth, there has evidently been a sudden surge as people wish to accelerate their expansion.

The valve has been opened and the pressure that mounted throughout the economic recession is being released in the form of more aggressive growth strategies. This means that speed in finding, researching and pursuing acquisition opportunities – particularly the highly sought after distressed businesses – is at a greater premium than ever.

As the M&A market climbs a steep upward curve, competition among business buyers for good value deals is going to increase. Ensuring they have their finger on the pulse is going to be key for those looking to add further to this year’s improved acquisition pot.

Struggling businesses failing to find time to create growth strategies

Wednesday, September 3rd, 2014

Two in five small business owners say they have found running a business more difficult than expected.

According to a YouGov survey, 62 per cent of small business owners say their work is a ‘constant challenge’. Furthermore, 44 per cent of owners revealed they have missed a personal occasion because they are too busy running the company, with more than one in 10 even failing to attend their own birthday celebration.

No doubt the turbulent economic climate is contributing to the stresses and strains on SMEs in the UK, with many companies stating that the push of recession might in fact make it harder for them to keep pace with the rate of growth. Another contributing factor is the lack of lending options available for these invariably more cash-strapped businesses; last week it was revealed that lending to SMEs via the Government's Funding for Lending Scheme (FLS) fell again in the second quarter of the year.

To return to the YouGov findings, the main challenges small business owners have faced include managing staff (32 per cent) and accounting or tracking finances (25 per cent). In fact, 22 per cent of decision-makers claim that their small business spends more than 10 hours per day on average on ‘behind the scenes’ admin tasks such as these.

With administrative tasks accounting for so much time, it is unsurprising that 73 per cent of the owners revealed they did not have time to think of ways to expand the business.

Needless to say, having a clear growth strategy is integral for any business, small or large. With funding woes exacerbating the general strains on SMEs, there are many businesses struggling to explore avenues for expansion.

Naturally for those in stronger positions, the opportunity is there for inorganic growth, taking on the struggling businesses to enhance their own offerings.

Half of small businesses living dangerous close to the edge

Wednesday, August 6th, 2014

Over half of the UK’s small businesses are not prepared for unforeseen problems, research has revealed.

According to a survey of 1,015 small companies (those with less than 50 employees) by Simply Business, 52 per cent said they had cash reserves of less than £10,000. More worryingly, 20 per cent saying they had none at all.

The findings coincide with other warning signals that have been surfacing for Britain’s SMEs. Firstly, the survey illustrates why the issue of late payment is so prominent and oft talked about among these smaller firms, with many unable to cope with a sudden missed payment.

Furthermore, the results are indicative of the rising number of ‘zombie businesses’ currently skulking around the UK. It is something we have written about before here; the term essentially refers to companies that cling to survival at times of little economic progression as they are propped up by easy forbearance from the banks and low interest rates, allowing them to continue to trade despite experiencing slow or no growth.

The lack of cash savings demonstrates the fragility of these businesses. And with this fragility comes opportunities for the stronger, more financially stable competitors in the market.

As the economy recovers, those whose foundations are unable to support growth will quickly begin to fall behind. And in the Darwinist nature of the business world, they could become attractive prey to the aggressors.

Simply Business’ research clearly shows that a great deal of companies are teetering on the brink of collapse – they are just one failed deal, one slow month or one unforeseen error away from entering serious trouble. As such, now is a great time to be closely monitoring winding-up petitions and administrations to ensure, should you be looking to buy a business, you are well poised to capitalise on these distressed small businesses.