Could Norwich be set for an upsurge in business sales?
- Credit: Mike Page
Norwich should brace itself for a flurry of business sales as investors up their interest in the city's firms, a study has found.
More than a third (35pc) of Norwich's medium-sized companies could wind up on the market as business leaders ditch their growth ambitions in favour of a quick exit, according to research by law firm Mills and Reeve.
The findings come as nearly a half (45pc) of the city's mid-market business bosses admit to receiving more attention from investors in recent months, while a third are concerned that they may 'miss the boat' if they do not accept an offer soon.
However, The Full Scale Ahead report has warned that selling a medium–sized business – defined as employing between 50 to 500 staff and recording a turnover of up to £200m – too early could block a firm's growth potential and 'lead to losses for both owners and the UK's business growth stock of the future'.
Claire Clarke, partner at Mills & Reeve, has urged business chiefs to 'hold their nerve' and not feel pressurised into exiting before the time is right.
'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,' she said.
'Yet, to many, scaling seems more challenging than targeting an exit. Both scaling-up and selling a business presents its challenges.
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'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.'
The research – part of a UK-wide survey of 500 business leaders – revealed that nearly two thirds (65pc) of the city's mid-market business leaders feel the UK economy would be stronger if more companies were scaled up rather than sold. Meanwhile, more than half (58pc) worry what damage might be dealt to the country's economic future if burgeoning companies are sold before reaching their full potential.
'The mid-market currently accounts for a quarter of the UK's turnover,' she added.
'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.'