According to a new report produced by Venture Finance, an asset based lender, one tenth of Small and Medium Enterprises are considering the acquisition of an opposing business. The report suggests that 2012 will see an increase in business acquisitions, with 25 percent considering a new acquisition within the coming six months.
The business deals may not be as straightforward or as successful as hoped, as the report also reveals a lack of experience among business owners when it comes to handling an acquisition. According to MD South at Venture Finance, Steve Websdale, businesses which have been relatively successful during the last few years may want to consider a business acquisition which is competitive. However, he also warns that professional advice may be necessary, especially if a business owner has no previous acquisition experience.
The research, which was carried out among owners and directors of 500 SMEs revealed that 29 percent of the business owners and directors wanted to acquire a business within a year. Worryingly, a third of the SMEs surveyed admitted having no knowledge of engaging in a business merger or acquisition, while over a third said they wouldn’t know how to initiate an acquisition. Websdale said:
“Despite the potential, many SMEs appear to lack the experience required to undertake a smooth acquisition or sale. This could lead to poorly structured deals and financial headaches for first-time buyers.”
A number of business owners may consider seeking advice from their small business accountants, or someone with previous experience. Making an acquisition is a time consuming process which requires considerable experience and resources.