OECD Revises UK Growth Forecast

The Organisation for Economic Co-Operation and Development (OECD) has revised its forecast for UK economic growth this year, upping the figure to account for a strengthening financial situation. At RTA Business, we recognise that this puts you in a stronger position when you decide it’s time to sell your business.

Various reports have suggested that business leader confidence is stronger than ever this year, due to national economic recovery and expectations that growth will return to pre-recession levels by this summer. This latest report is set to further persuade business leaders that now is the time to buy your business.

The OECD Forecast

This week the OECD released its latest forecast for UK growth, in what was an upward revision of previous estimates. In November, the Paris-based organisation claimed that in 2014 the UK economy would grow by 2.4%. Now they’re suggesting that the country’s economy will expand by 3.2%. This contrasts with an OECD average national estimate of 2.2%.

There are several factors that led to this revision of OECD growth estimates and each individually and collectively suggests an economy in full-fledged recovery. This month the services sector, which has dominated in recent quarters, rose for the 16^th straight month, sterling rose to a five and a half year peak against the dollar, and economic growth rates have continued to impress.

It’s important to note here that UK growth has outstripped forecasts for not only the US and China but every country in the G7.  Furthermore, global growth is expected to measure 3.4%.

RTA Business Comments

These figures suggest one thing - that it could be the right time to sell your business, and here’s why. First, the fact that the UK economy is set to expand this year, means that buyers should have more capital and when they have more capital coming in, they tend to want to spend that to create more – what  better way to do so than to buy your business?

Secondly, these figures should boost buyer confidence in the strength of the UK economy, meaning they’ll be surer that they’ll be able to profit from your business after they’ve bought it. Finally, these figures suggest that UK companies are in a stronger position than their foreign rivals, which further boosts business leader confidence.

At RTA Business we realise that these numbers indicate one thing- you are in a particularly strong position to sell right now.

RTA Business’ Top Five Tips For Effective Market Research

Market research is the lynchpin any successful business is based on, but it’s hard to know where to start when crafting an effective market research strategy. That’s why this week, RTABusiness Consultants thought we’d list for you these top five tips for effective market research.

You need to know your customer if you ever hope to sell your business. Not only is it the best way to actually make money (and show a buyer that your business will bump up their bottom line), but it also shows your buyer who they can target once they buy your business.

A buyer will want to know who your target consumer is, there’s no two ways about it. If you can’t show them that, they will walk away. So what do you need to know to cobble together an effective market research strategy?

A Few Tips from RTA Business

1) Be Broad: Use every avenue available to you – the more information you get, the clearer the picture of your target consumer will be. Use social media sites liberally to gather market data, as they have the capability to reach millions of people with minimal cost.

2) Open Ended Questions: Whenever you question potential consumers, do so by using open ended questions. This allows them to provide the accurate information you need to correctly identify your target market. Close ended questions often lead to gaps in information.

3) Embrace Convenience: Consumers tend to avoid answering market research surveys simply because they see it as a waste of their time, so make it convenient for them. An increasingly popular tactic is to approach consumers by smartphone, as in the modern world, smartphones are practically glued to people’s hands.

4) Political Correctness. Market research efforts have a nasty habit of offending people if questions are framed with language deemed unacceptable. This damages your overall brand. Always be conscientious of how consumers may react to market research methods.

5) Persistence Pays: Again, you’re probably not going to entice a consumer to contribute to your market research efforts on the first try, but you might on the second. Be persistent and they’ll contribute just to get rid of you!

The Benefits of a Profit Boost!

Sometimes in selling your business, milestones mean everything. When you announce major profit gains, it can make your business look so much more attractive to a potential buyer and this week RTA Business Consultants outline why.

It’s an obvious conclusion to reach isn’t it? The more profit you are making, the stronger your business, the more opportunity there is for growth. Even then, there are levels of degree when it comes to how influential profit margins are with potential buyers.

The Differing Benefits of Profit

There are two types of profit boost- gradual and spontaneous. Both have value in any strategy to attract a buyer to your business. A gradual rise in profit margins suggests a long term business model that is perfectly positioned to make money sustainably. This is an attractive to a buyer because it shows them that purchasing your company will provide them with a secure opportunity to grow their own venture.

The benefits of gradual profit rises are obvious, however the benefits of spontaneous profit boosts are not to be ignored either. A company will see a spike in profit levels usually after the introduction of a new product or service that has diversified their business.

There are benefits to this type of profit rise too, and it all relies on timing. Timing is a key issue – when is the right time to sell your business? If you put it on the market just after a profit spike, it shows buyers that now is the perfect time to buy your business and capitalise on your heightened profit capability.

LG Electronics: A Case Study

We can see how this plays out in the case of LG Electronics. The technology company recently reported a profit jump of more than a staggering 300%! Consequently net profit at LG Electronics measured 93 billion Korean Won in the first quarter of 2014. It stood at 22 billion Won the previous quarter.

Notably, this profit boost came at a time of great change for the electronics firm, as strong demand for its smartphones and TV’s were responsible for sales. Plans to expand its product range and introduce its new G3 smartphone later this year are set to keep profits high.

It’s important to remember that because of this news, LG shares rose 2.9% to 71,000 Won in Seoul this week. We see a direct correlation – a bump in profits made the company much more valuable in the blink of an eye.

If this exploration of profit margins should remind you of anything, it’s that timing is everything when you are looking to sell your company. At RTA Business we always suggest waiting for the time you can make the most money from selling your business.