“Good decisions come from experience, and experience comes from bad decisions.” – Unknown
One of the benefits of entering a fifth decade of business is the ability to look back. The concept of a “New Normal” or “It’s different this time” rarely holds true but another view does. Good businesses run thoughtfully and in a focused manner can withstand all types of storms.
Here are a few of the incredible business obstacles my partner and I have experienced since 1979:
- ’79-81 Double-Digit U.S. Inflation
- 1982 – Double-Digit Unemployment
- Black Monday, October 19, 1987, a 22.6% drop of the DJIA in one day
- Gulf War/Desert Storm ‘90-91
- ’01-02 Tech Bubble
- Iraq War 2003
- Great Recession ’08-09
- 2015-2016 Minor recession, severe contraction in U.S. Industrial Production
- Corona Virus Pandemic 2020
Just like all the other huge obstacles, we will look back on the Covid-19 Pandemic. Our clients confirm for us the opportunities ahead of them without dismissing the current reality. They may have to sacrifice short term profit but long term their outlooks are strong and their value will grow. Good businesses are resilient. Great businesses work on their business and make their best moves forward in downturns.
As a business owner, what should you do?
- Stay calm, resilient businesses continue to perform and will transact
- Let the IB help Buyers understand your company
- Sift out and eliminate any group that seeks to take advantage and prey on “market anxiety”
We have recently seen this play out in the market where a Buyer thought they could retrade an LOI for a 20% discount. The business has performed through the Pandemic. We lost 30-60 days, went back out to the market, and we’re poised to enter a new LOI at a 2-5% discount and a quick close.