A recent study has shown that 33% of UK SME owners have no idea what their own businesses are worth. The surprising findings were pooled from the responses of over a thousand directors in the UK and beyond.
The research extended to Holland, Belgium and Scandinavia, and found that our counterparts in mainland Europe were even less aware of their companies’ value. 40% of those polled by Marktlink on the continent admitted that they didn’t know what their business was worth.
It’s in the UK though, that owners may be missing out the most. Data from the London Stock Exchange Group shows that the UK now finds itself as the second most-targeted area for mergers and acquisitions worldwide.
The number of British mergers and acquisitions have risen by a staggering 88% compared to 12 months prior. Indeed, by the end of March, the UK had already seen over £60bn worth of M&A deals completed in 2024. Forecasts in general have suggested that 2024 will see an upturn in the amount of mergers and acquisitions, with UK SMEs being of particular interest.
Why should SMEs know their value?
While it may seem like one of the main things directors would know about their businesses, the actual worth of a company is often something that’s overlooked. Rick Smith, managing director of Forbes Burton explained that “company directors already have to spin multiple plates at once, and if they’re not looking to sell, getting a valuation is often low on their list of priorities”.
He added that despite this, “it’s still a good idea to have your business valued even if you’re not looking to sell right now. It’s good practice for owners to have an exit strategy in place should they need it, and an up-to-date valuation will inform any decisions they may make.
Should the desire to sell never actually materialise, a valuation can still be a useful tool for measuring business performance, and an easy gauge of success for shareholders to understand”.
Do you know how much your own company is worth?
As business sales specialists, we’re no stranger to valuing UK companies. Our online company valuation calculator is entirely free to use, and provides an accurate figure based on multiple factors. Give it a try to see how your business would fare in the eyes of investors.
Free Company Valuation Calculator →
Looking to sell?
We’ve helped countless business owners to achieve the best possible price for the sales of their companies. Selling a business can be a complex affair, and by enlisting our help, we can help you to not only avoid common pitfalls, but also stand the best chance of a successful takeover.
Call us on 0800 975 0380, or email [email protected] for a free consultation. There’s no obligation to use our services, and your calls or correspondence are completely confidential.
Related Articles
We're here for you.
As a dedicated team of Advisers and Consultants our aim is to help you fix the issues and solve the problems within your business.
Find out more →
