09/25/2021
Here's why YOU should be looking at M&A in SME as your golden ticket!
These are the factors:
1. Labor Shortages Force Businesses to Make Tough Choices, focusing them to increase costs, sell the business and have a backlog of work as well as accounts receivable. Employee retention plans, higher wages, better working conditions, culture and benefits could solve this problem.
2. Discounted valuations from Covid impact purchasing price and projected cash flows, during this time we can buy a business at a discount and everything goes back to normal the business valuation increases along with gross revenue.
3. Cheap interest rates, the power of leverage with minimal interest rates through the SBA, along with payment assistance and several different forms of financing to assist in growth.
4. Supply Shortages Impact Financial Performance, 61% of Owners Say They’ve Increased Prices meaning those in supply chain will get a steady stream of business and will be able to adjust pricing elasticity.
5. Adjusting to the digital age, because a lot of older business owners, businesses use referral based business or outdated legacy technology there is a great opportunity to take advantage of social media and digital marketing to scale a business. Increase margins with data in combination with software and increase efficiencies with management, sales, operations, processes and finance.
6. With over half of all privately held businesses with employees having owners over age 55 in the United States, we will see a massive ownership changeover of locally-held businesses as the ‘Silver Tsunami’ of retirements marches forward.
The vast majority (over 85%) of business owners do not have a succession plan in place, and increasingly, many are finding it hard to find a buyer when they are ready to sell. As a result, some of these companies will quietly close down, a very small percent will be passed on to family members, others will sell to another local owner, and some will be sold to a larger company or out of area buyer.
Two-thirds of wealthy business owners said the Covid pandemic pulled forward their plans to sell their business or retire, according to a survey from Clarfeld Citizens Private Wealth. - CNBC.
If you are interested in buying a company, want to becom a JV partner or want to capitalize in this investment opportunity reach out to us!
Here is a quote that might scare you:"90% or more of all startups fail within the first two years."When Looking at businesses and entrepreneurship its a lot easier to buy existing cash flow compared to creating it. This is where acquisitions come into play. People spend their entire
