Buying a business in Birmingham

Most guides to buying a business in a particular city are written to sell the city. This one starts with the least flattering number, because a buyer who finds it later will reasonably wonder what else was left out.

The figure, and what it actually measures

Two things about that before it is read as a verdict.

It measures start-ups, not established businesses. The five-year survival rate follows businesses born in 2019 and asks how many were still trading in 2024. It is the odds on founding something, not the odds on owning something that already trades. Buying an eight-year-old business is a different bet entirely, and the whole argument for buying rather than starting is that somebody else has already taken the risk this number describes. Our start or buy comparison sets that out.

And it cuts the other way. A Birmingham business that has traded profitably for eight years has done so through the hardest regional conditions in the country. That is evidence about the business, and it is worth more than the same track record somewhere gentler.

These are regional figures. The ONS does not publish survival rates at city level, so this is the West Midlands rather than Birmingham. The region contains a great deal besides Birmingham.

What it should change about your behaviour is the weight you put on the trading history. Ask for monthly revenue across three years rather than annual totals, and ask what happened in the years the figure is describing.

What actually trades

• Manufacturing and engineering. Birmingham's is the deepest such base of any English city outside the South East, and these are the businesses most likely to carry real plant. That changes the deal: equipment is usually valued separately rather than sitting inside the multiple, and it is the asset a lender can secure against. See below.
• Logistics and distribution. The motorway position is a genuine commercial fact rather than a brochure line. Yard and warehouse businesses trade regularly, and the lease on the yard is frequently the whole deal.
• Professional and B2B services. Accountancy, recruitment, IT, legal support. The same shape as everywhere: the most transferable earnings and the most contested prices.
• Hospitality and leisure. Large, competitive, leasehold, and priced at the bottom of the national multiple range for structural reasons rather than local ones.
• Health and care. Dental, veterinary and care services, with real regulatory barriers to entry and consolidators who buy repeatedly.

The three things that decide a Birmingham deal

1. Plant and machinery, valued properly

More Birmingham deals involve real equipment than deals in most UK cities, and it changes both the valuation and the funding.

Equipment is usually added to the trading value rather than multiplied by it, the same way a freehold is. Multiplying a profit that is already higher because the machinery is owned, and then adding the machinery, counts the same benefit twice.

Get an independent view of what it is worth. Book value follows a depreciation policy chosen for tax purposes and diverges from market value quickly, in both directions: a fully written-down machine can still be worth a great deal, and a recent purchase can be worth much less than it cost. A buyer who accepts the fixed asset register as a valuation is accepting somebody else's accounting judgement as a price.

The upside is that equipment is financeable. Asset finance secured on the machinery itself is often the cheapest money in an acquisition structure, and refinancing existing plant on completion can fund part of the purchase. Our guide to financing an acquisition covers how those layers stack.

2. The lease, and what is on the site

For a yard, a workshop or a warehouse, the site is frequently more of the business than the trade is.

Read the lease in full. Check the unexpired term, whether it is inside or outside the security of tenure provisions of the Landlord and Tenant Act 1954, and whether a change of control requires the landlord's consent. Then check two things specific to industrial sites: the schedule of condition, because dilapidations on a workshop can be a substantial sum nobody has quantified, and any environmental history, because contamination is the one liability that does not care whose name is on the lease.

Rateable values for any commercial property in England are public on the Valuation Office Agency's site. Look them up before the first meeting.

3. Whether the skills transfer

A manufacturing or engineering business often depends on a small number of people who can actually do the work, and they are frequently harder to replace than the owner.

Ask who those people are, how long they have been there, and what would keep them. Under TUPE they transfer on their existing terms with continuity of service intact, which is a constraint and also the reason the knowledge stays. The risk is not the transfer, it is the eighteen months afterwards.

For a Birmingham seller

Your buyer pool includes something most regions have less of: trade acquirers in the same or an adjacent process, who understand the equipment and can price it properly. They are usually the buyer who pays most, and they are also the one who will look hardest at the plant and at customer concentration.

The regional survival figure above is going to come up if your buyer does their research. The answer is the trading history, so have it ready: three years of monthly revenue, the adjustment schedule with evidence behind every line, and a straight account of any year that was difficult. Our guide to what a buyer will ask for is the full list.

Where to look

Search what is listed now by sector and location, free, no registration. Most listings are confidential, so expect a sector and a broad area rather than a name, and see confidentiality in a sale for why.