Professionals involved in buying and selling recruitment businesses have refuted claims made by a millionaire entrepreneur this week that business owners are unable to sell their firms because they are worthless.

Alchemy Network boss David Abingdon, who has made millions several times over both through his own businesses and by taking a share of the profits he’s made for others, says: “A lot of business owners who are selling right now are deluded, and their thinking clouded. The problem is that most businesses aren’t worth spit. They are worthless.”

John Bissell told Recruiter that Abigdon’s view was “far too simplistic”.

‘Business owners who wished to sell are as likely to sell their businesses now as they were at the peak of the market,” Bissell says.

Bissell adds that he is doing more deals than at any time in the past two or three years (Recruiter, 12 August).

Bissell says that far from being worthless, buyers are sometimes prepared to pay prices that were being paid at the peak of the market.

Tim Evans, director of Catalyst Corporate Finance, told Recruiter that while business owners “normally think their businesses are worth more than they are” Abingdon’s view was an “over statement”.

“You don’t value companies at a particular point in time. What you do is to look forward and ask what the business will be making in two to three years’ time. Regardless of a company’s performance, if a company is going to return to profit then there is some inherent and intrinsic value in the business.”

Evans accepts that valuations of publicly quoted staffing companies are below those reached at the peak in July 2007. However, based on analysis in Catalyst’s M&A (mergers & acquisitions) summer/autumn update, he predicts they will begin to rise in the final quarter of this year.