I'm thinking about selling my plumbing and heating business in Sheffield. We've been trading for 18 years, solid customer base, 4 vans, 6 employees. But I keep hearing mixed things about whether there are buyers out there for trade businesses in this region. Anyone got experience of selling a trade business in South Yorkshire recently? Is there actually a market or am I wasting my time?
Business Sales
Is there a market for established trade businesses in South Yorkshire?
There is a market but it's patchy. Buyers tend to be either larger trade firms looking to expand or individuals wanting to buy a job. The latter often struggle to get finance. Have you had any informal interest already tbh?
I sold a small electrical contracting firm near Barnsley about three years ago. Took nearly 14 months to complete. The buyer was a competitor who wanted the client list, and the apprentices. Price was decent but the due diligence was brutal. Be prepared for a lot of paperwork.
What's your turnover and profit? That makes a huge difference. Under a certain threshold and most business brokers won't even take you on.
Turnover is around £850k, net profit roughly £120k. We've got a good reputation locally but nothing flashy. I'm not expecting a massive multiple. Just want a clean exit.
At that size you're probably looking at 2-3x adjusted profit if you can find the right buyer. South Yorkshire has a decent number of trade consolidators active at the moment. Might be worth approaching a couple directly before gonna a broker.
Honestly I thinm the market for trade businesses in South Yorkshire is stronger than people realise. Lots of older owners looking to retire and not enough young people coming through to take over. The demand for established firms with with good staff is definitely there. The issue is often unrealistic valuations from sellers.
Have you considered an employee ownership trust? Might be a smoother exit for a business your size and you'd keep the team intact. Not for everyone but worth a look.
Employee ownership is a nightmare to set up unless you've got a very willing management team and a lot of patience. I looked into it briefly. The legal costs alone put me off.
The other thing is your reliance on you personally. If you're the one quoting all the big jobs or holding the key client relationships, buyers will discount heavily or walk away. Need to show the business runs withut you. That's often the hardest part for trade owners.
That's a fair point. I'm still very hands-on with quoting and and I know that's a weakness. I've got a supervisor who could step up but it would take time. Maybe I should spend a year transitioning before listing.
A year of reduced involvement would definitely help your multiple. Also get your accounts accounts in order now. Clean books, proper contracts, service records. Buyers in the trade sector are very detail-oriented because they're often buying the vans and equipment as much as the goodwill.
What about your employees? Are they aware you're thinking of selling? That can be a dealbreaker if they find out late and start looking elsewhere. Some buyers want them locked in with retention agreements before completion.
All good points. But to answer the original question directly, yes there is a market. It's just not a fast one. Expect six to twelve months if you price it sensibly and have your house in order. The buyers are out there, they're just picky.