The survey of 250 SME founders and owners throughout the UK, revealed that 41% of SME’s say they are more likely to consider a sale, investment or refinancing in the 12 months ahead, compared to the previous 12 months. Around one in ten (11%) said they explored an exit in 2024, rising to 14% considering it in 2025 – an increase of 27%.

However, the research also revealed businesses could have an inaccurate view of how they are actually performing before they approach a significant financial transaction. While 63% agreed that data insights have become even more important in the current environment, some 40% of those surveyed said their ‘gut feeling’ about how their own business is performing can be contradicted by the data they have.

Data blind spots and disconnects

While half (45%) are happy with the access to meaningful data their business has and 42% say they are able to use data to help them make better business decisions, when probed, the same respondents confirmed that 64% don’t use a finance system and only 22% have a KPI report management system. This further highlights the misplaced optimism businesses may have around their critical business data.

When asked about what they could provide in readiness for a significant financial transaction, such as sale, investment or refinancing, over half (52%) admitted they don’t have full visibility of monthly management accounts for the last three years and would only be able to provide this to potential new business partners or investors in part - including P&L, balance sheet and cash flow.  

Sam Phillips, Founding Managing Director of K3 Advantage commented on the findings: “This research highlights a significant disconnect. Clearly businesses feel their data is supportive of their day-to-day operations, but they are overlooking the true potential of understanding what the data is really telling them; having the ability to recognise growth potential, forecast risks and opportunities presents their business for a transaction with the strongest narrative to help them realise their ambitions.

“Businesses are leaving themselves open eroding value in believing they have all the data they need – when in reality, they’re not even close. This is true even if business leaders aren’t considering a sale in the near-term; improving data visibility and quality is integral to optimising business performance, and planning ahead can never start too early.”

Business optimism

Almost three quarters of SMEs (73%) admit that running a business now is harder than it has ever been. Among the measures they are taking in response to economic volatility, two fifths (40%) said have explored reducing costs and operating budgets in the past 12 months. However, the research suggests that an appetite to sell or embark on financial transactions does not indicate a mood of despondency or discouragement among UK SMEs.

In fact, businesses are feeling bullish and resilient – with three quarters (75%) acknowledging the tough operating environment but indicating that they still feel confident about overcoming the challenges this presents.

This confidence is further underlined by SME leaders’ views on their business’ attractiveness to potential buyers, with over half (52%) believing their company to be a compelling sale prospect.

The value of robust data

Iglu Tech Group is a Digital & Cloud Transformation solution provider and work as a key Microsoft Partner.

As part of its ambitious growth strategy, Iglu sought to acquire Impreza Computer Services. To complete this, Iglu required a pre-lend to raise capital for the acquisition, as well as comprehensive financial due diligence to cover any risk or opportunity around the complete purchase of Impreza. Within this process, any data gaps within the company’s financial information needed to be resolved.

Jason Yeoman, Managing Director of Iglu, remarked: “The devil is in the detail. The same can be said when working on M&A. Never more have I relied on data to inform me of the performance of a business that we might be looking to acquire. It’s the place where the truth resides. Anecdotal information and sentiment remain important, but by removing the emotion, you enable more pragmatic decision making to happen. Let’s face it, it’s the emotion that often gets the better of entrepreneurs. Data driven advisory services not only assist in seeking out where the value lies, but by doing so, enables you to optimise performance, efficiency, accuracy and therefore, value.”

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