While half of owners of UK small and medium enterprises have considered selling their company to a foreign investor, fewer than one-in-ten would favour such move. UK business owners are not the only ones underestimating the opportunities for growth from such a cross-border transaction, though, with Marktlink finding that the UK is the least popular site for investment in Western Europe anyway.
Amid mounting uncertainty about the future of the European project, entrepreneurs across the continent seem to be less inclined to buying their way into new markets, according to a new report. Surveying business owners in the Netherlands, Belgium, Denmark, Germany and the UK, researchers from Marktlink found that an average of 60% would prefer to sell to a domestic party. Meanwhile, only 10% would prefer to sell to an international party.
While it might be assumed UK businesses would be least-open to cross-border transactions, following the complication of Brexit, the 8% reported there was actually second-highest behind Belgium – at 17%. Meanwhile, entrepreneurs in the Netherlands were the most resistant, at 6%.
However, in the UK’s case, this may be hurting owners’ chances of actually maximising the value of their firm. The report found that 52% of UK SME owners expect their companies to become more attractive to foreign buyers and investors, indicating an optimistic outlook toward the attractiveness of the UK economy and a latent interest in international engagement.
But the low preference for international transactions suggests that many business owners may lack awareness or understanding of their strategic potential and possibilities that can be explored with such an approach. At the same time, this may be putting off foreign investors – with UK companies not currently in demand among EU entrepreneurs.
Marktlink found that 9% said they would favour moving for a company from the UK. In comparison, all other geographies had double-digit demand, including a 29% high for Germany.
Victoria Ansell, Joe Moran and Jonny Parkinson, managing partners of Marktlink’s London, Midlands and North West offices, commented, “Our research has revealed a significant opportunity for UK SMEs to gain traction in international markets, yet the apparent reluctance to engage with foreign buyers or sellers suggests that business owners are limiting their growth potential unnecessarily. By shying away from more global opportunities, they may be missing out on expanded customer bases, diversified revenue streams, and valuable partnerships that could drive innovation and competitiveness and, in turn, drive value.”