Economists and other pundits have been talking about a slowdown for at least a year. Some say we’re headed for a recession; some say we may still get a “soft landing.” It’s easy to let the bad economic news affect your outlook on your business, especially if you’re thinking about retiring or selling.
It’s true that the economy can have an impact on your company’s profitability and value on the market. Inflation means everything costs more, from equipment to materials to labor. There’s no doubt your bottom line is affected, and that influences how buyers value your business and what they’re willing to pay. Money is tighter now, and that affects the number of buyers who can afford to buy larger companies.
But all the bad news is really just noise for most owners. Yes, business may be slowing down, but there are natural cycles in every industry. Double-digit growth is simply not sustainable forever. And the HVAC business is in a better position than many other kinds of business; no one can go without heating and air for long. If new construction slows down, repairs of current systems are still steady. People may be buying more service plans in order to lengthen the life of their equipment.
The fact is, you don’t recognize a slowdown until after it’s happened. It’s better for your company – and your mental wellbeing – to stay focused on your operations and your plan. Now is a good time to make sure you’re operating as efficiently as you can. Cut costs (not corners) in ways that make sense.
If you have a plan in place for selling your company, stick to the plan; the decision to sell your company should never be an emotional one. Yes, the national economy may have some implications for your sale, but that’s a good reason to ask an experienced broker for a valuation. Get some professional advice about what’s happening in the market and what you can do to maintain or improve your company’s value.
There are always buyers looking for a profitable company with strong potential. That’s true in every market, weak or strong. The number that matters is the number you want to walk away with when you sell. Your broker can help you find the right buyer at the right time for your business and help you achieve your goals.
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