Coronavirus,and the economic impact of various forms of lockdown, have dominated everything in 2020 – not least the outlook for companies across the building services and construction sectors.

We work at a pretty blistering pace because we’ve set ourselves some large goals. We look closely at dozens of potential acquisitions every month: that’s been the case since before Covid and continues to be so. We make our assessments quickly: is your business right for our portfolio, does it meet our criteria, does the fit feel right in early conversations? Often – in the majority of cases, in fact – we find that the deal just isn’t quite right for any number of reasons, and we’ll politely call a halt to proceedings.

Equally, we can be in discussion with a seller who, at some stage, decides not to proceed with the sale. That can also be for a variety of reasons: maybe they’ve started to consider what selling the business will mean for their legacy, and feel compelled to keep the family business going; maybe the passion they thought they had lost for the business has been reignited by the prospect of stepping away.

But in reality, it’s most often about money.

Company valuations have taken a hit

These are different and difficult times, and the value of companies has been impacted dramatically. That just stands to reason when companies in the construction sector were unable to work for at least a quarter of the year! The valuation of companies has inevitably taken a substantial hit, and the slow recovery of industry means that the numbers will continue to look poor for a number of years.

One of the current issues is that sellers often have a fairly fixed idea in their minds about what their business could or should sell for, and quite rarely is that number based on the cold hard reality of the current economic landscape. Sometimes they refer to an earlier valuation of the company which was made in more buoyant times – and the truth is, valuations today just aren’t going to match up.

Create a viable exit for your business

My advice to anyone considering a sale – even or especially if we’ve spoken before and you pulled back if our offer didn’t quite meet your expectations – is that it’s better to create a viable exit for your business now, rather than wait two or three years hoping for the pre-Covid valuation to be restored. Your brand name, your management team, your customer base, your local reputation, your business autonomy: all of those things will remain, but by becoming part of a larger group, you’re securing those things for the long term, rather than fighting the odds in the short term.

Selling right now might not deliver the windfall you’ve spent your working years dreaming of – although it’s possible. But the alternative for many companies is to simply lock the doors one Friday, and send their loyal workforce back out to the jobs market.

Becoming part of the United Capital group will give you the resources you need to create growth, the stability you need if you want to exit, and access to support and expertise that you just don’t have right now. So, never be scared to come back to the table; let’s have another conversation.