The Electrical Contractors’ Association has warned that business owners who are keen to sell up and enjoy their retirement are finding it increasingly tough to find buyers.
A variety of reasons lie behind the lack of buyers, including continued tight bank lending, public spending cuts and the uncertain financial climate.
The scarcity of willing and able buyers opens up numerous opportunities for those with cash who can move fast. There are currently numerous businesses up for sale at bargain prices and owners – especially those looking to retire – may be willing to do a good deal.
If they are unable to sell up, many owners who are approaching retirement are now being forced to close down their businesses in order to release some money, or alternatively must continue to run the business for far longer than they would have liked.
President of the Electrical Contractors’ Association, Diane Johnson, said, “Some of them are saying they are closing their businesses down. It is not in the hundreds but it’s definitely more than normal. They are closing them down because they can’t find people to buy them, because the people working for them can no longer raise the finance.
“If you go to the bank, they are asking, 'what’s your order book like for next year?’ Some companies don’t have order books beyond the next few weeks,” she added.
Whereas in previous years, family business owners were prone to taking some equity out of the business and handing it over to their staff. However, with the ongoing economic situation, increasing numbers of staff are now unwilling to take on the business as they are concerned they will not be able to realise the necessary cash needed to do so.
Ms Johnson added that confidence has undergone a severe knock due to the sweeping public spending cuts.
For those that are looking to make acquisitions, the lack of other buyers in the marketplace – and oversupply of owners keen to sell up – could provide the perfect opportunity – at a knock-down price.
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