Company valuations are the talk of the town; especially in our part of town. In the heart of Shoreditch where MarketInvoice is headquartered, “next tech unicorn” is a title that many companies are working to achieve. While undoubtedly an important metric of success, valuation is not a number that we choose to lose sleep over. For us, it’s more about the impact we’re making for our customers: UK SMEs.
Keen to understand the attitude of UK SMEs to company valuation, we commissioned research* to explore the topic. Our latest MarketInvoice Business Insights survey takes a deep dive into the views of SME owners on what drives valuation, their priorities, the challenges they face and how valuation has changed for these businesses in the last 12 months.
Let’s take a look at some of the highlights:
IS COMPANY VALUATION A BIG DRIVER FOR UK SMES?
We’ve identified that for many small business owners, the answer is yes. In fact, 66% of the businesses surveyed consider company valuation a huge priority; something they think about all the time. This is especially among younger entrepreneurs, with 78% naming company valuation as priority one.
HAVE UK SMES INCREASED VALUATION IN THE PAST 12 MONTHS?
It’s interesting to note that while the majority of business owners are driven by company valuation, few are substantially increasing theirs. Less than a third of businesses increased valuation by more than 10% in the last 12 months
WHAT FACTORS CAN HELP DRIVE COMPANY VALUATION?
The business owners we surveyed acknowledge that having access to the right kind of finance can really move the needle when it comes to company valuation. Out of a varied list of factors, they ranked lack of appropriate finance options as their biggest hurdle. This was above factors relating to people, brand, technology and skills.
WHAT ROLE DOES GROWTH PLAY IN COMPANY VALUATION?
Importantly, UK SMEs are knowledgeable about the variety of finance options out there that can drive growth and indoingso company valuation. More than a quarter of entrepreneurs consider invoice finance to be the finance option most likely to help achieve their growth ambitions. This was closely followed by asset-based finance and traditional credit cards.
WHAT DO UK SMES HOPE TO ACHIEVE?
Surprisingly, despite Brexit turmoil, more than half of business owners want to start exporting and open offices abroad. This speaks to an attitude of optimism among entrepreneurs as they strive towards ambitious growth and expansion goals.
“UK SMEs are thinking big, which is great for our economy, employment and global positioning,” says Anil Stocker, MarketInvoice Co-Founder and CEO. “There are some huge macro and political changes taking place with Brexit and the US-China trade challenges but it’s great to see entrepreneurs seeing the growth opportunities around these events”.
Research based on a survey of 1,000 business owners of UK Ltd companies (who employ between 1 and 249 staff) between 31st May and 5th June 2019. Survey conducted by LM Research & Marketing Consultancy (Marketing Research Society approved partner and ESOMAR corporate member).