“Statistics indicate that, as a result of overwork, business owners and executives are dropping like flies on the nation’s golf courses.” — Ira Wallach
One year ago, I wrote an article detailing how recent local and national developments were having a direct impact on how both sellers and buyers were looking at business opportunities.
In many cases, it was good news for owners who were thinking about selling their business.
I wrote about how the softening of the local economy was causing owners to re-evaluate how they conduct business, and the amount of time they have to put into it.
One year later, although the local economy is slowly rebounding, many owners who had to work harder than they had ever worked before to weather the storm, are re-evaluating their desire to dedicate so much of their time to their business.
For many of these local business owners, it’s better to sell out than burn out. The unfortunate result of postponement can be that the decision gets made for them. Poor health, divorce, excess business demands, etc., are very often the symptoms of an owner who should have sold but deferred the decision.
Nonetheless, when their profits are strong, a seller is in a good position to get a good price for their business. This is especially true when the number of profitable businesses for sale are minimal.
Combine this with what may be the most important factor of all — there are a number of qualified buyers in our market who are looking to purchase a successful business. In Northern Nevada, these buyers are coming from a variety of areas. One group is the former institutional investors who are disenchanted with what has transpired with their stocks.
In the past, they were concerned with what had transpired with Enron, Global Crossing and WorldCom, etc. Over the years, the names and faces have changed, even Martha Stewart was indicted, but the bitterness hasn’t.
These buyers believe that being active in their own business will allow them to secure a significantly greater return on their investment.
Career-changers are another group who is buying businesses. Former middle managers and executives who have taken early exit packages from the companies where they have worked for many years are buying businesses. Often too early to officially retire, they are recognizing the benefits of being in business for themselves.
For many of them, it isn’t just the money they’re dreaming of, it’s the desire for greater control over their investments.
We are even seeing employees who are not from the executive ranks of companies looking at entering the entrepreneurial arena. For these buyers, it is more than just the financial gain they’re pursuing — it’s the craving for a chance to make their own decisions and have more influence over their lives.
Finally, there are a large number of buyers who have recently relocated to our area who are looking to become their own boss. The majority of these types of buyers are relocating from California.
A business broker is a professional who sellers should look to for assistance when deciding to sell. With the volume of buyers who are looking at business opportunities, a skilled broker can separate the time-wasters (i.e., those who think they might like to buy but aren’t ready for it) from the serious buyers.
A recent review of prospective buyers at our office indicated that less than 8 percent of those who had intentions of buying a business ever did!
By allowing a skilled broker to confidentially guide the serious sellers through the sales transaction step by step, owners will be able to concentrate on their job — making their business as profitable as possible.
Buzz Harris, a Licensed Business Broker with The Liberty Group of Nevada, writes a recurring Voices column for the Northern Nevada Business Weekly. Contact him at 775-825-3948 or via email at BHarris@TheLibertyGroupofNevada.com.
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