Business Resiliency

So yesterday I got the year end numbers for one of my clients. I've had the listing for a little while, but the seller is happy with my work thus far and the prospective buyers that I've brought to the table. For differing reasons we've yet to complete the transaction, but let me be clear - this is not a failing business. It's established (almost 20 years), very profitable, and very resilient, which is what got me thinking about blogging on it a little. For confidentiality reasons I have to be a little vague, but read on.

So, here you have this service business that operates in a zone that has been closely tied to commercial and residential construction and provides a service that can easily be seen as a luxury. What do you think of with this economy when I say construction and luxury? Yeah, you're right, the odds are against this business' survival. Earlier this year, the numbers were GRIM and it's hard to sell a business when their numbers look grim, to say the least.

In the face of this however, the owner didn't panic, didn't offer a fire sale, didn't say "aw, the hell with it, I'm just going to close up shop. He gave some thought to what other work he could do and what other services he could provide with the equipment he already owned and with the expertise his employees already had. He stayed focused on diversifying his service offerings and turning over all kinds of rocks to look for clients to sell to. Have you ever heard the expression "stick-to-it-iveness"? He has it.

So the result: he had a blowout 2nd half of the year. 3rd and 4th quarter sales were up versus the prior year, cash flow was right in line with prior years, he's put contracts in place for multiple years forward, guaranteeing future revenue streams, and overall he's put this business in a much better place than it was a year ago, all during the crappiest economy our generation has ever seen. When the economy rebounds, the business will be poised to take advantage. That's Business Resiliency, and that makes for a great business for someone to acquire and grow! Know anyone? Let me know.

Now's the Time

A New Year, now's the time to make this blogging thing more of a habit.

Now's the time to take on new habits that will improve business. It's the time to say 'adios', 'farewell', 'bon soir', and a general HEARTY 'Good Bye' to what has been for MANY a tough year! So Now's the time to say 'Hey' to practical changes, improvements, enhancements. Now's the time to post a new blog, update my website, generate new business, grab some new clients and continue to solidify my place in the business brokerage community.

For anyone reading this - spread the good word: Now's the time to buy a business. It is entirely a buyer's market and there's a lot of good news to keep in mind as you're considering an acquisition. It's like the perfect storm of events (but in a good way):

• Seller's are motivated and many of them have ridden out the storm, trimming expenses, diversifying their revenue base and keeping their business on solid footing. There are MANY good strong and still very profitable businesses available for acquisition and they've done well even in this economy.
• Multiples are down - you get more for your money.
  
• Seller's are willing to provide creative financing. More than ever, motivated sellers understand that it's just what they have to do to prove that they stand by the strength of their business.
• Banks are starting to get hungry again. They pulled back hard over the last couple years and are ready to get back in the game
• The Senate has agreed to extend the SBA Recovery Act Funding. Read here for more details, but suffice it to say this is very good news: http://www.webcpa.com/news/Senate-Extends-SBA-Recovery-Act-Funding-52779-1.html
  
• Economic indicators are pointing to an upturn in the economy. It won't be a boom recovery, but a nice steady climb back to solid ground. Businesses that have remained successful in the last few years are perfectly positioned to capitalize and come out of this smelling like a rose.

Have you or someone you know been thinking of acquiring? Now's the Time.