Gareth Smythe, the CEO and founder of Hilton Smythe – one of the foremost business brokering companies in the UK; has highlighted three types of businesses for serial entrepreneurs to start in the UK.
According to Statista, a record 22,305 businesses will go bankrupt by the end of 2022 in the UK, second only to France’s 22,305
Add to that a bleak economic outlook, and it becomes apparent why starting a business in the UK is risky.
However, not all is doom and gloom.
In 2022, the market size of the private equity industry was expected to grow by 7.1 per cent, reaching nearly 3.2 billion British pounds. An emerging and continually growing market has increased opportunities for businesses that aim to sell.
Therefore, it’s essential to note which types of businesses have a higher potential for success and can prove lucrative when “selling equity to the highest bidder” in the long run.
Here, Gareth Smythe, the CEO and founder of Hilton Smythe – one of the foremost and award-winning business brokering companies in the UK; has highlighted 3 types of businesses for serial entrepreneurs to start in the UK.
1- Managed Service Provider (MSP) businesses are always ideally placed in terms of value-building and “saleability”. This is because they have large potential for significant recurring and contracted revenue. They are generally positioned in a clearly-defined niche – for example, in data science, cloud engineering, cybersecurity or hardware development – that requires specialist expertise and a unique product. In other words, significant barriers to entry render businesses within the MSP sector particularly valuable.
2- Specialist recruitment businesses also sell conveniently and generate much interest from prospective purchasers. A partial explanation for this is that recruitment is a saturated market. Therefore, other businesses within the sector will always seek out strategic acquisitions for their growth interests and market share. Moreover, recruitment businesses often prove resilient in the face of economic changes – an important consideration considering the recent turmoil of Brexit, Covid-19 and the impending recession – because businesses will always need staff.
3- E-commerce businesses that manufacture their own products also prove popular with prospective purchasers: such businesses keep expenses low, enable greater control over the shape of the business, and offer the potential to build something unique. The result is excellent profits and greater growth potential. At Hilton Smythe, for example, we have recently brought to the market an e-commerce timber supplies business and an e-commerce company selling unique personalised digital products, both of which have achieved some impressive financial milestones and which look set to generate much interest.
Ultimately, when it comes to value-building, entrepreneurs should think about establishing recurring revenue streams for their business, diversifying their client base, and building a skilled and experienced team that can run day-to-day business operations independently of themselves. Most importantly, the focus should be on identifying and promoting the business’ competitive advantage.
While indeed not every budding entrepreneur would find these businesses a cup of their tea, for those with the right combination of skills and expertise and adequate funding, either of these could be the answer to a question most individuals with an entrepreneurial mindset often ask themselves: “What business should I start?”