Experts share predictions for 2024

Accountants at a Shrewsbury firm have been sharing their predictions for the coming year when it comes to buying or selling a company.

The team at Dyke Yaxley Chartered Accountants, in Old Potts Way, is part of the nationwide Corporate Finance Network which has been collating the experiences of corporate finance advisers in the owner-managed business sector.

Mark Bramall, for Dyke Yaxley, said the Network had also been exploring how the market may progress in 2024. As a member of the Network, we were asked to contribute our opinions to the report and once everyone’s thoughts were combined, there were some real key highlights.”

Mark said the report showed:
* OMB sellers need to be more prepared for sale, so they stand out in a competitive market
* Buyers are increasingly nervous of higher funding costs so the deal structure needs to accommodate this
* The political uncertainty will have some impact next year, but sensible transactions will still complete

In the report, 53.3% of advisers thought it was a buyer’s market, but said that due diligence is taking longer as purchasers were making sure that the risks were known and could be kept to a minimum. Unrealistic expectations of deal valuation from vendors were mentioned by 26.7% of advisers, so understanding the drivers for increasing market value would be a key part of exit planning for any business owners looking to sell in the next few years.

Tech, software, AI, ecommerce, telecoms, professional services and insurance were all sectors where consolidation activity was high. But many advisers said they expected further sectors would experience an increase in deal activity.

Mark said: “With this report showing that due to next year’s General Election, advisers believe that 46.7% and 33% of buyers would become more nervous about deals from Q1 and Q3 respectively, business owners who are looking to exit need to ensure they stand out in the market.”

Chairman of The Corporate Finance Network, Kirsty McGregor, said “Exit planning includes working on a business to increase its value and finding the best time to sell. This applies to the lifecycle of the individual company, but also being in the right place at the right time when consolidation activity increases. Tax policies are unlikely to move adversely during 2024, but 2025 is less certain. Business owners who want to take advantage of current rates and reliefs should make decisions soon.”