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Many of you still see a lot of opportunity in the industry, even though it is wrought with some challenges. I'm of the same opinion. This industry has been good to me and my family for decades, and I think it will continue to provide a lot of opportunity.
But I have heard from members of the industry who expressed frustration with the direction we are taking. Some of you see the challenges and opportunities, but aren't sure how to tackle them; however, that is because your business is making money now and generating healthy cash, so you aren't sure now is the right time to try.
There is a lot of opportunity for entrepreneurial business owners at present. We have seen a strong seller’s market for the past 3 years. We continue to see a strong seller’s market at present. But looking ahead, we also see some headwinds that can change the market dynamics. As quickly as prices rise they can also drop. If you have a timeline of at least 10 – 15 years, this is a great opportunity to reinforce or build up your business and generate lots of cash. We know that the industry is changing and shops will require ongoing investments. But while relative valuations will likely decline over that period (M&A tends to move in cycles), the benefits of building and strengthening a business over that time period will likely surpass the short and medium term pricing risk. Of course this may not hold true for everyone, as some shop owners in highly competitive markets will likely find that competition may increase faster than they can keep pace. Sure there are technological changes on the horizon, but there is also plenty of time to adapt your business model to take advantage of the yet to be seen opportunities present in technological disruption. Continue reading Brad's blog by clicking here. |
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