With the coronavirus pandemic impacting almost every aspect of our everyday lives, 2020 was far from a normal year. Businesses across the UK and the world have felt the impact of stay at home orders, seeing reduced revenues and profits as offices emptied and shops closed.
However, many businesses performed better as a result of the situation, with listed companies such as Netflix, Ocado and Zoom seeing their share prices rocket as demand for their services increased.
When buying a business, it is important to take into consideration the outlook for the sector as well as the performance of the individual company to ensure the investment is worthwhile in the long term.
If you are looking to buy a business this year, take a look at our top business sectors for growth in 2021.
Information Technology (IT)
Information technology has been one of the biggest winners of 2020 as a sector, with lockdown accelerating the adoption of digital technologies and almost every business now being reliant on some form of remote or flexible working.
With remote working likely here to stay, IT companies have a unique opportunity to support businesses with deploying and maintaining new infrastructure to enable employees to work both from home and from their offices as required.
Cybersecurity has also become an area of opportunity for businesses in this sector, with remote working leaving individuals and organisations at a higher risk of cyber attacks.
Additionally, as more businesses establish a presence online, demand for domains, website hosting, email management and other associated services are likely to bolster the sector through 2021 and beyond.
Due to their business model, IT companies often have recurring revenue in place from retained clients, with supplementary income being generated from one-off projects.
Accounting & Payroll
As the accountancy industry revolves around ever-changing legislation, it is an increasingly energetic market in terms of buying and selling businesses; with Making Tax Digital (MTD) being the latest large change that has resulted in senior accountants looking to sell their practices.
Accounting and payroll was an essential sector in 2020, with businesses reliant on their accountant for new obligations including Coronavirus Job Retention Scheme (furlough) reclaims, Statutory Sick Pay reclaims, grant applications and financial advice to support them through a difficult period.
As legislation becomes more and more complex, business owners are more likely to switch to an accountant or payroll specialist rather than trying to manage their finances in-house.
We are specialists in the buying and selling of accountancy practices and have found this sector to be extremely lucrative, with existing accountancy practices able to grow up to 8 times quicker via acquisition vs. relying solely on organic growth.
Telecommunications
Telecoms companies have been another winner in 2020, with a significant upturn in demand as a result of remote working and a need for enhanced connectivity.
Digital transformation poses a significant opportunity for businesses in this sector, with many organisations now looking to accelerate their investment as a result of the pandemic.
Connectivity is also an area of opportunity, with online education, video conferencing calls and remote working all highlighting the significance of a reliable and uninterrupted connection in both work and home environments.
In addition to traditional telecoms, unified communications platforms such as Zoom and Microsoft Teams have become synonymous with social isolation and are likely to continue being used by millions every day for personal and professional reasons.
What To Look for When Buying a Business?
Whilst we expect these sectors to experience further growth in 2021, that’s not to say other sectors won’t also thrive, or that every business in these sectors will perform well. Before buying any business, there are several factors to consider beyond the sector the business operates in such as:
- Location of the business
- Current employees
- Current clients
- Assets owned
- Services offered
- Turnover and profits
- Legal structure
- Potential for growth
A business is a significant asset, so there is no room for error when negotiating or agreeing to the terms of the deal. Being seemingly unprepared can be costly and may also result in the other party taking advantage.
For this reason, it is highly recommended that you employ the services of professionals including a business broker, lawyer and accountant to ensure that all the negotiations and legal work are performed correctly.
Finding you the Perfect Business to Buy
If you are looking to acquire a new business in 2021, we can help find suitable businesses for sale that meet your criteria and ambitions.
Alternatively, if you are looking to cash in on your hard work and sell your business, we can help find a buyer that mirrors your businesses values and goals.
To start a real conversation about buying or selling a business, give one of our team a call today on 0117 379 0117 or fill out a contact form and we will get back to you.