for the Sale of Your Business?
The Wall Street Journal published an article citing a survey by The Conference Board of 750 CEOs and C-suite executives in which 60% of those surveyed expect an economic recession in their geographic region within the next 12 to 18 months. Of those surveyed, 15% believe their region is already in recession.
One can hardly read, watch, or listen to news reports without the topics of rising interest rates, a sliding stock market, and a looming recession being at the center.
Dozens of private equity groups and family offices with which we have frequent communication are already signaling their reaction to what they believe is the inevitable economic recession on the horizon.
This reaction includes:
- Concerns about the cost of capital in a rising interest rate environment and the downward pressure that increased cost will put on the valuations they can justify in their acquisition of small and medium-sized businesses
- An increased appetite for the acquisition of recession-proof or recession-resistant businesses that have a better chance of successfully weathering the expected economic storm
In our role as advisors to clients potentially seeking to sell their businesses, we can’t influence the interest rate environment or overall economic conditions. But we can highlight those industry sectors that are historically recession-resistant, and help business owners decide if the timing for a sale is right.
Below is a short list of business sectors that are likely to be attractive to acquirers, even if the economy skids into a full-blown recession:
- IT, SaaS, and related technology services
- Quick-Serve-Restaurants (fast food)
- Healthcare Services – particularly senior services and behavioral health services
- Staffing/Personnel Services – workers will transition from sectors heavily impacted by economic recession to those sectors that thrive
- Pet Care – veterinary, grooming/board, and other pet-related services
- “White Van” Services – HVAC, plumbing, skilled-trade, and other repair, maintenance, and cleaning services; residential, commercial, and industrial
- Janitorial, Cleaning, and Facilities Maintenance
- Energy and Infrastructure
This is certainly not a comprehensive list and represents only a sampling of industries that normally fare well through recessionary conditions. For some business owners, the current and impending economic conditions may represent a hurdle for a potential sale. For others, the environment may be exactly right for an advantageous sale.
To start the discovery process, please reach out to me directly or to the CRI Capital Advisors team at assess@criadv.com. Taking the first step is free and creates no obligation.