The reality in today’s SME businesses is that there is more uncertainty about the future profit outlooks than they have been in previous years. The reasons are varied and beyond the scope of this blog. But, uncertainty reduces interest, price and salability in SME businesses. The majority of SME businesses rely on the ownership/proprietorship to some degree for the profit levels achieved to date. ‘Buyout’ terms, in my view, are more about reducing the risk to maintaining profit levels than anything else.
The absence of the role and activities performed by the ownership/proprietorship is seen as a risk to the business operation in the hands of a business buyer.