Over the last two years, we’ve all been a bit all over the place. From experiencing the initial uncertainty of COVID to now being in a bit more stable place, it’s been a very long and very strange trip.
Our current environment still has an underlying note of uncertainty and fear but we now have hope. Hope for the future and hope for what it brings.
The economy is up and unemployment is at a low: so what does this mean for selling your small business?
In my experience, profitable and successful small businesses experience very little volatility because they transact well in any market. If your business has a consistent, proven track record, it SHOULD always be able to sell.
There’s Never A Bad Time for A Good Business
Small business investors know how to recognize a good business that has clean and professional books, a lean operating system, well documented processes and procedures, loyal and clever employees, vendors and customers, and an industry appropriate ROI. In good economic times and bad, these small businesses steadily and predictably chug along.
For businesses that don't have a solid foundation, lack good leadership, have messy books, and suffer concentration issues, they can always expect challenges to arise when transitioning to a new owner, regardless of the economic environment. In fact, some of these challenges can't be overcome and can actually prevent the business from being sold.
The moral of the story: exit planning is just good business strategy. With proper planning, you can rest easy knowing your business will sell at top dollar in good markets and bad.
Ok, But What About the Texas Market?
If you’ve been on the fence about buying or selling your small business in Texas, now is a great time to talk to an expert about it (like me, which you can schedule through this link).
The Texas real estate market is SO OVERINFLATED that many investors are being forced to look at small businesses as an asset class instead of real estate. Crazy, right? Savvy business owners are taking full advantage of this.
I’m currently seeing an uptick in business buyer inquiries but what does this mean for your small business? Simply put: it’s a sellers’ market!
I believe savvy investors do not want to pay the prices we're seeing in Texas real estate markets and so are looking at small business investments to see if they can get more bang for their buck. (I would even go so far to argue that small businesses are a better place to put your money right now than real estate.)
Small business valuations continue to remain steady and consistent and so right now, investors are getting more for their money compared to other (more volatile) investments like real estate.
Additionally, COVID has pretty much redefined commercial real estate since so many professionals are working from home.
Many people are choosing to stay away from crowded public spaces like malls, movie theaters, and restaurants. Given that we’re going on year three of the pandemic, it’ll be interesting to watch how commercial real estate (and the small business market) pivots in light of all of this.
Still have questions or want to talk about what you can do to prepare your business to transact at top dollar? Click here to book a free consultation with me! There’s nothing I love more than helping small business owners sell their companies.