Buyers are Active

After the world turned upside down in 2020, M&A professionals didn’t know what to expect. But in 2021, there has been more demand by buyers than we’ve seen in many years. Why are businesses selling at this rate when the pandemic isn’t fully in the rear-view mirror? Here’s a sampling of what we’re hearing:

• Experienced buyers are taking a long-term view of businesses and the economy. They’re buying the future of the company because they have either survived or simply understand the cyclical nature.
• Many business owners want to grow quickly, and the fastest path to that growth can be the strategic acquisition of another company that complements their existing business. This may mean buying a business that is in the same line of work but offers a desired geography, or it could be a business that is different but offers existing customers an added service or product. As business owners look for creative ways to achieve growth, acquisitions of existing businesses will continue to increase.
• Many buyers want to take advantage of easy and inexpensive access to funding. There are many financial options available at historically low rates. And the cost of obtaining an SBA loan has never been lower for smaller businesses.
• Covid, while not eradicated, is far less threatening to businesses, and buyers believe there is an end in sight. If they buy now, they can reap the rewards of businesses returning to normal
• Covid may have even had an impact on changing attitudes and aspirations. Many individual buyers have decided that they like to work on their own terms, and owning a business is one of the best ways to have that control. The pandemic has made many people think more like entrepreneurs. They want the freedom, flexibility and control of owning a business. They can earn the financial rewards and get the personal satisfaction of the American Dream.
• More opportunities to buy a business arise every day. Baby boomers are looking to sell the businesses they built. In the third quarter of 2020, 28.6 million boomers retired. That’s 3.2 million more than the prior year. And those who are selling businesses are taking advantage of this hot seller’s market.

Although it’s not what most people expected to see, we’re in a very active M&A market right now. Buyers are actively seeking businesses and have access to the funds to spend. If you’re considering selling your business within the next five years, allow us to help you get it in the best position to get the best possible price when you’re ready to sell. Contact O&O at 913.648.1085 or email michael@ok-om.com.