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Small business sector news round-up

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Researching how to run a small business can take time and effort, leaving you without any spare time. But much changes in the small business landscape week by week.

Here is a roundup of small business news to help inform your decision making.

We look at businesses' efforts to be eco-friendly, the expansion of several UK business, SME survey results and the effects of the London 2012 Olympics.

Green SMEs

The government has laid out details of its Green Deal, which offers businesses and homeowners the chance to save money on their energy bills. Businesses will be able to apply for funding to help improve the energy efficiency of their premises. Currently, a fifth of the UK's carbon emissions are from the energy used by businesses and workplaces. Find out about the Green Deal here

And international businesses are also doing their bit for the environment, with the business community playing a more prominent role than ever before at a UN environmental conference. Multinational companies including Dell and Unilever have pledged more than $513bn to Rio+20, the UN Sustainable Development Conference. The US government is partnering with more than 400 companies to reduce deforestation in their supply chains by 2020.

Green funding

Green issues are not just for those already in business, ethics and sustainability can be a focus for potential business buyers and growers. EthicalCommunity.com, the online ethical marketplace, has raised £200,000 in funding from angel investors. The site, founded by university friends Liam Patterson and Jason Dainter in 2010, is the equivalent of eBay for ethical product sellers, from handmade soap to fair-trade tea and coffee. The site takes a 10 percent commission rather than a listing fee from users.

Success stories: Food, Retail and Property

Poundland is a UK business that is set to expand. The discounter has revealed ambitious expansion plans which confirm discount retail as a boom area, with consumers expected to prioritise value for years to come. The chain, whose slogan is "Yes, everything's £1", opened 62 stores last year and plans to open a further 60 over the next 12 months, as well as expanding into Europe. Reporting a 22% sales rise, Poundland is one of many value retailers thriving in a challenging climate.

Nearly one in three US-based prospective buyers said they were likely to obtain a loan from the seller, compared to fewer than one in 20 in the UK

Meanwhile, soaring profits at Barratt Homes have proven that construction companies aren't always a risky acquisition during downturns. Fuelled by incentives for first-time buyers and greater mortgage availability for new build, the house builder expects to announce a gargantuan 160% rise in profits.

However, figures from consultancy firm Ernst and Young have revealed that large construction firms have issued the highest number of profit warnings since 2008.

News of sales as well as growth comes from United Biscuits, which is selling part of its business, putting on the market the component of its operation which manufactures Twiglets, Hula Hoops and KP nuts. The British snacks group has been split into two separate businesses, one of which will be put on the market. Credit Suisse Group is overseeing the division of the British biscuit maker, which is owned by US private equity group Blackstone.

The Arts industry

In the music industry, Universal Music insists it will treat small digital businesses fairly if its proposed merger with EMI Music goes through. Competitors have raised concerns that the new entity would be powerful enough to dictate terms to digital start-ups. If Universal Music took over EMI's library, it would own the labels behind a third of recorded music in the United States. This would strengthen its ability to negotiate, as services such as Spotify and Rhapsody can't succeed without offering such a large proportion of top songs and artists. Universal is seeking to placate sceptical EU regulators by promising to sell off assets to dilute its market dominance.

Have you considered Seller financing?

When looking to buy a business, some buyers may be put off an attractive acquisition by the up-front cost of buying the business. However, we have found that US business buyers are nearly eight times as likely to use seller financing as their UK counterparts, according to a BusinessesForSale.com quarterly survey.

Nearly one in three US-based prospective buyers polled in 2012 said they were likely to obtain a loan from the seller, compared to fewer than one in 20 in the UK. A loan from the seller to the buyer, seller or owner finance can rescue deals where risk-averse banks decline to fund an acquisition.

The survey went on to reveal that more than half of the prospective buyers surveyed are buying a business for at least the second time. 56% of buyers have bought a business before, with many being serial buyers having made two, three, four or more acquisitions. Around the same proportion of sellers - 53% - are selling a business for at least the second time.

The Olympics, sponsorship and SMEs

During the London 2012 Olympics, company sponsorship becomes more prominent and a subject with greater pertinence. However, it remains to be seen whether it can work to further an SME's own interests to spend money on advertising its products or services via sponsoring sporting or charitable endeavours. Olympic athletes have thanked their fans on Twitter but International Olympic Committee Rule 40 bans them from directly thanking companies that sponsor their kit and so forth, unless they are official sponsors. This could be denying athletes from utilising their own personal sponsorships when exposure is highest.

Many elite US sportspersons feel that they wouldn't be at the Olympics without their sponsors, suggesting a strong bond between the athletes and their smaller sponsoring companies. So in a coordinated effort they tweeted: "I am honoured to be an Olympian, but #WeDemandChange2012."

So does sponsorship work? Here's a test - Can you name the worldwide Olympic partners who each paid $100 million for their rights? The answers are:

Coca Cola       Acer computers         Procter &Gamble       Omega

Samsung        VISA                           Atos IT services

Dow                Panasonic                  McDonald's                 General Electric

Did you manage to name them all?

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