Recent research shows that 33% of UK small business owners have no idea the value of their business. The surprising findings were gathered from the responses of over 1,000 of her directors in the UK and abroad.
The study also extended to the Netherlands, Belgium and Scandinavia, and found that mainland European peers were even less aware of their company’s value. 40% of continental European respondents surveyed by Marktlink admitted they don’t know the value of their business.
But what owners will miss most is the UK. According to London Stock Exchange Group data, the UK is currently the second most targeted region for M&A in the world.
The number of mergers and acquisitions in the UK has increased by 88% compared to 12 months ago. In fact, by the end of March, the UK had already completed £60bn worth of M&A deals in 2024. General forecasts suggest that M&A volumes will increase in 2024, with UK SMEs in particular attracting attention. .
Why do small businesses need to know their value?
While it may seem like one of the main things directors know about their business, the actual value of the company is often overlooked. Rick Smith, managing director at Forbes Burton, said: ‘Company directors already have multiple plates to spin at the same time, and if they don’t intend to sell, getting a valuation is high on their priority list. It is often the lowest in the world.”
Nevertheless, he added: “Even if you don’t plan on selling right away, it’s a good idea to have your business appraised. It’s good practice for owners to have an exit strategy in place should the need arise, and it’s good practice to have an up-to-date valuation. The amount informs every decision they make.
Even if a desire to sell doesn’t materialize, valuation can be a useful tool for measuring performance and an easy measure of success that shareholders can understand. ”
Do you know how much your company is worth?
As business sales specialists, we are used to valuing British companies. Our online business valuation calculator is completely free to use and provides accurate numbers based on multiple factors. Try it out and see how your business looks in the eyes of investors.
Free company valuation calculator →
Are you thinking of selling?
We have helped countless business owners achieve sales for their companies at the best possible price. Selling a business can be a complex undertaking, but with our help, we can help you avoid common pitfalls and ensure your acquisition stands the best chance of success.
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