Business sales have always been a source of interest. Most of us wonder what the secret behind a record breaking business sale could be. Find out how Friends Reunited and Moneysupermarket.com timed their business sales just right.
Fans of the Apprentice and The Dragon?s Den have done much to improve the British view of business and entrepreneurialism. Whereas once we were all in the dark about how to set up and run a successful business, these TV shows have opened our eyes to the possibilities.
While setting up a business is one thing most people are only too keen to talk about on TV, successfully managing the sale of a business ? particularly one that makes newspaper headlines and leaves the founders extremely rich ? is something few entrepreneurs discuss openly.
The art of selling a business at the right time to maximise your revenue is something all entrepreneurs work hard at.
Is it all to do with timing the economic conditions just right? Courting the right investors? Or is it all about having a great new business idea in an industry where growth is likely to take place?
These are just some of the questions many business people ask themselves when thinking about selling a business.
Some of the most recent big business sales in the UK have involved technology and online businesses. Friends Reunited was one of the first big social websites:? a social network before the phrase was even popular. It made the headlines when it was sold for ?120 million in 2005 to ITV, making the founders overnight multi-millionaires.
Another example of British business success in the online arena is Moneysupermarket.com. Today, price comparison websites are common:? every other TV advert seemingly advertises the services of meerkats or over-weight opera-singers. But in the late 1990s and the dawn of the online industry, price comparison was a new and innovative product.
?Moneysupermarket.com made the company?s founder, Simon Nixon, a very rich man. In 2007 Moneysupermarket.com floated on the London Stock Exchange at a value of ?843 million, netting Nixon an estimated ?101 million in the process.
So what do Friends Reunited and Moneysupermarket.com have in common? There are a number of interesting comparisons that can be drawn between Friends Reunited and Moneysupermarket.com and many lessons anyone considering a business sale needs to consider.
Online Businesses: online was, and still is in many respects, a new industry with massive potential for growth. Choosing an industry geared for growth will help a successful business achieve a high sales value.
Economic Conditions: the economic conditions were right for both businesses to expand. In the heady days of the pre credit crunch business era finance for new website ventures was easier to come by. This obviously benefitted the expansion plans of both companies as they looked to establish themselves as the dominant players in their market.
Ahead of the Curve: where Moneysupermarket.com and Friends Reunited led the way, others soon followed. As the experiences of both companies after their initial sales illustrate, in more recent years competition has increased dramatically. In the case of moneysupermarket.com it now finds itself in a protracted (and expensive) four way battle for dominance of the price comparison market with the likes of comparethemarket.com, confused.com and gocompare.com. While the company is undoubtedly still making money ? it is spending a lot too!
Timing: Timing is everything where a business sale is concerned and on reflection it looks as if both businesses timed the market just right for a successful sale.
Rachel is a freelance blogger with a particular interest in the UK economy and businesses for sale.
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Source: http://makemoneyhelper.com/record-breaking-business-sales/
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