One in ten SMEs want to buy another SME

A new study from asset lender Venture Finance reports that one out of every ten SMEs in the UK is thinking about purchasing a competitor.  The increase in acquisitions looks like it will begin again over the course of next year as businesses feel a bit more secure about their own futures with about 25% of those in the study thinking about making a purchase at some point in the first half of the year.

However, some business owners admit that their acquisitions may be stalled a bit due to the fact that they do not have experience buying out other businesses.

MD South for Venture Finance Steve Websdale stated that businesses that were able to get through the economic recession somewhat unscathed are now at the point when they can begin to profit by purchasing competitors and buying them out, however, as many of these businesses will be ‘first time buyers’ they are going to need guidance when it comes to the acquisition to make sure that they take the best approach both structurally and financially.

The study results come from research that included 500 SME owners and their directors and revealed that about 29% of those planned to make an acquisition.  A third stated that they do not know how to actually start a merger or the acquisition process.  Another third stated that they have no idea how to even plan for making themselves open to an acquisition that would be profitable for them.