- Nearly half of Cambridge mid-market companies poised for sale
- Almost two thirds of the city’s mid-market business leaders report an increase in investor interest in their company
- More than a fifth feel “forced” into the decision to sell
- UK economy at risk from pressurised decisions to sell instead of scale
The study reveals that many Cambridge business leaders are looking to sell even if they could scale up and increase the value of their company in the long term.
Nearly half (46%) of Cambridge’s mid-market business leaders are actively planning on selling their company. At the same time, almost two thirds (61%) are also experiencing an increase in investor interest in their firm.
While this could be interpreted as a sign of a dynamic mid-market, the report reveals that in some cases the decision to sell has been made due to a number of factors beyond the business owner’s control.
Almost a quarter (24%) of all Cambridge business leaders feel they could be “forced” to sell their business ahead of time. The same number (24%) fear that they will “miss the boat” if they do not exit immediately and deal activity dies down.
Claire Clarke, partner at Mills & Reeve, comments: “The mid-market currently accounts for a quarter of the UK’s turnover. Not only is this stalwart of the economy capable of delivering even more growth and jobs; from its ranks will emerge Britain’s next generation of world-leading large enterprises.
“While selling may be the right choice for some companies, scaling up can, with the right support, offer greater returns for business owners, shareholders and the UK economy as a whole.”
Full Scale Ahead
Owners of medium sized businesses emerged from the recession with confidence and the belief that they could grow their business with the right finance and support. Yet, to many, scaling seems more challenging than targeting an exit.
Full Scale Ahead: Paths to growth for ambitious UK businesses has been released ahead of a series of events supporting mid-sized businesses to scale up and achieve their ambitious growth plans.
The study further reveals the impact of pressurised sales on the economy. Nearly three fifths (59%) of Cambridge’s mid-market business leaders feel the UK economy would be stronger if more companies were scaled up rather than sold. More than half (54%) worry about the country’s economic future because so many great prospects are sold before they reach their full potential, and over two fifths (44%) say business exits have had a detrimental impact on the local economy.
Despite the importance of scaling up to business owners and the economy, Cambridge’s business leaders face numerous challenges in achieving this. Two fifths (41%) claim it has never been so hard to grow their business and also believe scaling up involves more risk than selling. In this challenging environment, more than two fifths (44%) will switch their strategy from growth to survival if the UK economy shows signs of deteriorating.
Claire Clarke adds: “Owners of medium sized businesses emerged from the recession with confidence and the belief that they could grow their business with the right finance and support. Yet, to many, scaling seems more challenging than targeting an exit.
“Both scaling up and selling a business presents its challenges. Those owners looking to sell their business should hold their nerve, not be pressurised into exiting too soon, and instead wait for the optimum time to exit. Those looking to scale should put the right people and processes in place to enable them to fulfil their potential, and must build scalability into their business model.”
To download a copy of the report or to read case studies from inspiring scale ups about how and why they scaled their business, visit www.fullscaleahead.co.uk or www.mills-reeve.com
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