Restoration Industry Lessons from the 2008 Recession
Selling a business can be scary. Terrifying when the economy isn’t cooperating. Here are a few facts that will ease your fears.
There are three primary factors driving the value of your restoration business:
- Business performance- making any money?
- Seller’s personal timing- ready as an individual?
- State of the industry / economy- still a solid business model?
Ideally, all three are in alignment. Rest easy however, even during the best of times this is a challenge.
From 2008 – 2011 the industry proved it was recession resistant, not recession proof. Many restoration companies grew during these years.
Does emergency response stop because the stock market is down? No. There is money to be made in a difficult economy. Many of you are in opportunistic spots as you continue to service ongoing disasters and discover how to serve new clients during this COVID-19 pandemic.
Though your business model may look a bit different, it doesn’t necessarily mean you’ll struggle or not be able to pursue an exit.
After 20+ years of transactions I’ve learned an owner’s decision to sell is rarely due to financial reasons alone. Often sales are driven by other factors: age, health, burnout, or an industry that’s no longer recognizable.
Yes, some of these events can be anticipated, but many occur unexpectedly. Regularly I hear, “I’m on a 3-5 year plan to exit.” Within days they’ll then say, “I really need out… how quickly can you get it sold?” How does this happen? It’s simple…
You’re not ready to sell… until you are. Then it can’t happen fast enough.
Advanced preparation can be an owner’s best weapon. To be clear, it does not mean you’re for sale, only preparing for one. Obtaining answers is not difficult, plus they’ll offer the confidence and peace of mind as you move closer to an exit.
Industry / Economy
Though the recent economic slowdown has resulted in a decline of acquisition activity, there are still solid buyers looking for viable restoration businesses. Due to the strength of the industry, many restoration businesses should be front and center as solid acquisition targets.
There are many variables to consider when contemplating a sale. Receiving solid answers is paramount. Your exit strategy will be stronger for you and your company.