As 2015 draws to a close, it is a good time to take a look at the consistent trends that I saw while helping people to buy and sell businesses in Calgary this year. While the oil industry and major elections dominated the news, plenty was happening behind the scenes with small to medium sized businesses across many industries. Below are some the major trends that I noticed in 2015.
- As the year progressed, there was an increase in the amount of calls and referrals from anxious sellers. Many of these sellers had unsuccessfully tried to sell their business on their own or through a Realtor. These sellers were frustrated and concerned that they would not be able to sell their business for a fair price.
- Franchise owners trying to sell their business found it challenging to deal with Buyers and the Franchisor. Many owners were unaware that the Franchisor often has an approval process that can be cumbersome and slow.
- Business owners took stock this year to determine the true worth of their business. Despite high sales, many owners were surprised to learn their businesses were not worth as much as they hoped after factoring in costs such as inventory, rent, fees, and staff.
Selling a business is always challenging and only 16% of all businesses listed for sale actually sell. Calgary business owners had more success selling their business when they used a Certified Business Intermediary. Throughout the year, I helped business owners to address the above mentioned challenges by
- providing a broker opinion of value;
- helping owners to develop and implement a plan to increase the value of their business;
- expediting the sales process by working cooperatively with Franchisors; and
- facilitating the sale of their business by collaborating effectively with lawyers, buyers, landlords, and other parties.
Interestingly, the downturn in the oil industry has injected more potential buyers into the Calgary landscape. Many of the executives and employees who were laid off this year have the resources to buy a business. The biggest challenge in matching these buyers to the best opportunity is helping them to gain some clarity on what type of business they are best suited for.
Right now in Calgary there are many excellent opportunities for business buyers and sellers. Moving into 2016, I expect there will be a great deal of positive activity in the market for small and medium sized businesses. The biggest challenge will, and always has been, matching buyers with sellers and helping them to make a deal that is in everyone’s best interest. If you are thinking of selling or buying a business, contact me to find out how I can help.