Leeds’ mid-market companies could face surge of pressurised sales

According to new research conducted by Mills & Reeves, mid-market companies in Leeds could be soon faced a wave of pressurised sales.

Based on opinions of 500 leaders of SMEs, the nation study unveiled that many are looking to sell even if they could scale up and increase the value of their business in the long term.

30% of mid-market business leaders in Leeds are actively planning on selling their company, with 50% of those expecting a sale by April 2019. 55% are also experiencing an increase in investor interest in their firm.

Although this implies a sign of a dynamic mid-market, the report also reveals business owners are deciding to sell due to factors out of their control.

25% of Leeds-based mid-market business leaders are worried they will “miss the boat” if they do not exit immediately and deal activity dies down.

Nationally, 33% of UK mid-market business leaders are actively planning on selling their company, with 51% of those expecting a sale by April 2017. 55% are also experiencing an increase in investor interest in their firm, while 29% of mid-market business leaders who are looking to sell their company feel they are being “forced” into this decision

Chris Ross, partner at Mills & Reeve, said: “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.”

The reprt, Full Scale Ahead: Paths to growth for ambitious UK businesses, was released on 20 April 2015, prior to a series of nationwide events supporting mid-sized businesses to scale up and achieve their ambitious growth plans.

The study further reveals that 68% of Leeds’ mid-market business leaders feel the UK economy would be stronger if more companies were scaled up rather than sold. 60% are concerned about the country’s economic future because so many great prospects are sold before they reach their full potential, and 30% say business exits have had a detrimental impact on the local economy.

Despite the importance of scaling up to British business owners and the economy, Leeds’

business leaders face numerous challenges in achieving this. 50% claim it has never been so hard to grow their business and 35% believe scaling up involves more risk than selling. In this turbulent environment, 49% will switch their strategy from growth to survival if the UK economy shows signs of deteriorating.

Chris Ross added: “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.”