It never ceases to amaze me how our customers use the gloom and doom media news stories as an excuse to either not make decisions, or make the wrong ones.

For an individual looking for a small business to buy, for whatever reason, their decisions about what to do of course need to be made against a backdrop of what is going on in the world. However, they also need to pay attention to the details of their situation and the businesses they are considering rather than assuming that if, for example, the stock market is tanking that the business they are looking at is also. For that matter when times are good in general they also have to pay attention to details, because a business that they are considering may be “sinking during a rising tide”.

We live with business cycles. After more than 20 years as a Business broker I expect that it will be hard to sell businesses during a presidential election campaign because of all the bad things the candidates say are or will be happening.

An entrepreneur who is going to be able to successfully run a small business will be able to understand the context within which the business they are looking at functions, and figure out whether it makes sense to buy it, regardless of what the media claims is going on on a national or global basis.

While there are few “recession proof” businesses it always appears that the downswing is not as bad as the doom sayers predict, just like the upswings are usually not as high as the euphoria speaders claim or predict.

So why is this a good time to buy a business?

  • - Because the timid would be buyers are setting on the sidelines, so there is less competition,
  • - The sellers are more willing to consider reasonable valuations for their businesses, particularly if business is down a bit,
  • - The sellers may be more motivated if they ahve saved up during the good times and are not looking forward to a period of lower profits.

It is always a good time to buy a business, as long as you approach the marketplace intelligently. During a time of a business cycle going down is the best time to catch some bargains! Figure out how the current cycle is impacting the business you are interested in, and how the inevitable business cycles will impact it and buy into an operation that is going to be well placed as the cycle goes back up. For that matter a lot of businesses are not even bothered by some cycles.

There are risks involved in buying any business, at any time. How you evaluate them is what makes a difference. There will always be business cycles, and how you react to them and position your business will determine how they impact you.

And let’s not forget that while there are all kinds of stories about the credit crunch we still have local banks looking for deals to finance for some of the best interest rates in history.

So if you want to own a business it is a great time to shop for one, regardless of the efforts of the media and the politicians to convince you that the sky is falling! In fact their chatter may be establishing the right conditions for you to find a really good deal.