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- © 1997 - 2009 Dynamis Plc
By David Spittles
INEVITABLY, the credit crunch is taking its toll on the UK's enterprise culture as tight lending and tougher trading conditions combine to stifle start-ups and curtail business growth. Research by Barclays suggests up to 150,000 small firms will close by early 2010. But small business advisers stress that plenty of opportunities still exist and finance is available to back viable projects.
Indeed, the downturn is spawning opportunities not previously open to individuals, according to Christie & Co. an agent specialising in licensed premises and retail shops.
Take the pub sector. "About five per cent of the UK's 17,000 free houses changed hands last year and the vast majority were acquired by big pub companies," says Neil Morgan. "But these companies have now curtailed their acquisition programme and a huge number of freehouses that would have been packaged up will now be sold individually. New entrants and private buyers are not excluded from the market."
Christie's finance division has managed to raise £100 million of funds for clients so far this year, an increase on the same period in 2007, as buyers seek specialist broker help.
Moreover, demand remains strong for "lifestyle businesses" such as small hotels, guest houses and sub post offices, while more than a third of convenience stores are being snapped up by first-timer buyers.
BusinessesForSale.com reports that numbers are "increasing rapidly" in London, reflecting existing owners' desire to sell. This website features over 60,000 business opportunities - and not just in the UK, 130 countries are covered. "We have businesses to suit virtually everyone and most budgets," claims a spokesman.
The spread ranges across industry sectors, from niche sole-trader businesses to franchise operations to manufacturing and export.
A sample of small enterprises for sale in the capital include a leasehold pub at the Oval Kennington, a City sandwich bar, a beauty salon in Islington, a Soho nightclub, a designer furniture store in north London, even a roving hotdog cart.
Buyers can register for email alerts that identify suitable businesses the moment they appear on the market.
Seasoned entrepreneurs say the business that needs most careful thought is the one you start from scratch. No matter how thoroughly you research your market, you are never sure how good the idea is until you are up and running.
If you are offering a service or product with a difference, you will probably grow slowly at first while your market learns about you. So be sure to have a financial cushion to see you through this period.
On the plus side, an entirely new business may be the best way to exploit a gap in the market. And, unlike when you buy an existing business, there is no premium to pay for "goodwill".
Also be clear about your aims. Do you want to be a sole trader or small company where the business relies solely on you providing the product or service say, a picture framer?
Or do you have much bigger ambitions - developing a business where potentially the sky is the limit: a business that can grow through staff recruitment, acquisitions and exports? There is a huge difference between owning a corner shop and building up a nationwide chain of them.
Copyright 2008 Associated Newspapers Limited
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