Manufacturing Biz #2 - Magazine - Page 14
THE NEW FRONTIER:
RIDING THE WAVE OF SME
SUCCESSION M&A
I
n an era characterised by seismic shifts
in the global economic landscape, a
remarkable phenomenon is unfolding,
one that heralds the largest generational
wealth transfer in history. As the sun
sets on the careers of the baby-boomer
generation, a new dawn beckons for the
young, ambitious and visionary. At the
heart of this transition lies the vibrant
domain of Small and Medium-sized
Enterprises (SMEs), where opportunity
knocks louder than ever before.
A HISTORIC TRANSFER AWAITS
Picture this: over 75,000 companies in
the UK alone, each a testament to the
entrepreneurial spirit, boasting revenues
north of £1,000,000. Their architects? A
generation of business owners now on
the cusp of retirement. But this isn't a
narrative confined to the British Isles.
From the fjords of the Nordics to the
vibrant markets of the USA, and the
bustling economic landscapes of Germany
and Australia, this trend paints a global
canvas. The baton is poised for passing,
but the question looms – who will take the
helm?
AN UNPREPARED LEGACY
A startling revelation by Wilmington Trust
sheds light on a critical gap – almost
60% of these privately-owned bastions
of industry lack a clear succession plan.
The foundation of their life's work, their
companies, remain without a formal
valuation, an oversight that could lead to
untold losses in potential and opportunity.
ENTREPRENEURSHIP THROUGH
ACQUISITION: A NEW PARADIGM
Enter the bold and the brave, fuelled by
the pioneering ethos of "Entrepreneurship
Through Acquisition," a movement
birthed in the hallowed halls of Harvard
Business School. This burgeoning wave of
entrepreneurs sees not just companies,
but legacies ready for a new chapter. They
recognize the inherent value in established
enterprises, where profitability, not just
potential, shapes valuation. It's a shift
from the ground-up approach, moving
away from the venture capital frenzy to a
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more measured, value-driven investment
in proven entities.
THE MISMATCHED MARKETPLACE
Yet, the journey is fraught with hurdles.
According to insights from BizBuySell, a
staggering 80% of businesses listed for
sale find no buyer, a testament to the
chasm between seller expectations and
market realities. Often, inflated valuations,
spurred by overzealous brokers, derail
potential deals, leaving businesses in
limbo.
BizCrunch: THE BEACON FOR ASPIRING
ACQUIRERS
In this landscape of untapped potential
and navigational challenges, BizCrunch.
co emerges as a lighthouse for the intrepid
acquirer. With its vast repository of data
on millions of companies, BizCrunch