A group of business executives wrapping up a meeting. A New Year To Buy A Business And Opportunities Galore!
A group of business executives wrapping up a meeting.

I am often asked by various publications to comment on the business for sale market given the economy at any particular time or when there may be an election looming.

I am neither an economist nor psychic, so while I always am always happy to provide my opinion, I avoid making hard predictions

however, when there is any decline or slowdown in the economy, people look for answers and hope.

Whenever there is a down period, deal flow declines along with overall uncertainty.

Further, small businesses can go through a slow period and so their financials can take a hit, which hopefully, it a temporary situation for them, but a terrific opportunity for a buyer to get the purchase price down and negotiate very favorable deal terms. But to do so, one ingredient is paramount – buyers need to take a step back and analyze potential businesses for sale from a high-level perspective, rather than a short-sighted view.

What I mean specifically is that it is highly likely in a down period or just after that most businesses a buyer may consider purchasing will have now completed a difficult period.

You must dig past the urgent issues of any recent declines and spend time accessing the important ones of what the future will bring. As I told you, I am not a psychic, and so I avoid getting delusional about the future of any business for sale that I consider buying. I would always rather err on the side of conservatism in determining whether the immediate past performance is sustainable instead of dreaming about the allegedly opportunistic things I can do with the business in the future.

However, in the tougher times, it is important to take a proper approach to what the future holds. I do not mean for any buyer to hallucinate about the changes and improvements they think they can make, which often does not materialize.
Rather, understanding what specific events must happen to get a business back on track needs to be analyzed. This is not a matter of simply blaming any past decline on the overall economy. That is far too simplistic an excuse. Instead, you need to determine what is happening within the guts of the business such as learning:

How are the customers themselves performing? What external factors have contributed to any past decline? Are these issues that can be easily resolved? If so, when? If it is an “anyone’s guess” answer, then you may want to stand clear. It is far better and has proven to be infinitely more plausible when the owner can be responsible to dictate and manipulate the results. So you need to determine specifically what it is that you can do to guarantee the business will be sustained, and then grow under your ownership.

This comes back to what I have been teaching and preaching for two decades to business buyers.

This is not the time to try to be something that you are not. A hard core and brutally honest assessment of your strengths and weaknesses is paramount in this endeavor.

If you do not marry your best strengths to a business, no amount of hard work, effort, enthusiasm or confidence will make up for a shortfall in the core skills required to operate, sustain and build it.

Conversely, when you apply whatever it is that you do best to a business that requires that specific talent, the business will ultimately flourish, regardless of the short-term economic climate. And with the current market conditions, you can easily leverage the deals terms way beyond normal purchase prices and structure an incredibly favorable purchase once you know how to do it.

Do not let your objectives flame out if the overall economy is down. It is usually a phenomenal time to take advantage of the marketplace.



This article represents a fraction of what you’ll learn on this topic in the How To Buy A Good Business At A Great Price© series - the most widely used reference resource and strategy guide for buying a business. To learn more click here

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