The thing with Tsunami warnings is that they appear over and over again following reports of earth quakes, but they seldom manifest in anything discernible to those on the shore. So with time, people, cities, and governments start to ignore the warnings. Frogs in warming water.
When the big event occurs. The unprepared citizens witness first hand entire towns being washed off the face of the coast, nuclear power stations being shut down, or not. And vending machines being left unlooted. This was once a real thing in a first world country.
My South African clients are giving giving vent to any number of local scenarios, ranging between two extremes:
- Zuma will be out by Christmas, and in jail by the new year (Unlikely)
- All is lost, the country has been entirely captured. Democracy is a myth in South Africa. Stock up on canned goods and buy Bitcoin. (Also unlikely, although I do find myself attracted by the notion of a finite issue, decentralised, non fiat, digital asset)
We all have our own expectations of the future, and our actions or inactions will be influenced by the current turmoil in the political, social, and economic malaise; but that malaise is the single biggest reason for so many of our clients retaining us in the last year.
As Stephen Grootes says:
“The next five months in our politics could determine the coming decade”.
As luck would have it for those approaching retirement in the near future; there is a growing number of investors looking to expand their own projects into business owners’ horizontals and, or, verticals. They are getting their own acts together for a strong upturn which is quite possible, once the madness is over.
- Horizontals – competitors, industry related, and complementary businesses.
A franchisee in a successful chain of restaurants buys a store of the same franchise which becomes available on the other side of town, and also makes an offer for the new store being contemplated in the new mall.
A hairdresser buys a nail salon in the same mall so that it can cross sell to both businesses’ customers.
- Verticals – in the same supply chain to an end user.
A large group owning a logistics company, an abattoir, and a coffee bean importer, purchases a national chain of restaurants to enable spare capacity in the abattoir and the logistics businesses to be utilised, while securing a market for its beans.
The supplier of beauty products buys both the hairdresser and the nail salon so that it can benefit from gross margins on a longer chain.
The potential investment situation is evidenced by the large amount of money sitting unused in large businesses, corporates, and in pension funds. It is the same money which Bell Pottinger might suggest is being held ransom by white monopoly capital (WMC) – an apparent thing – for defined performance by the ruling elite.
Psst… it is money being held back looking for decent investment. Stop being a box!
As a business owner entering the closing years of an exit plan, you have an unprecedented opportunity to tap into that enormous resource; but only if you play your cards right. PrepareYourBusinessForSale™. Get prepaired. The group or company which buys your business is not going to pay over the top. They will pay the value you are able to confidently demonstrate. It’s up to you to demonstrate that value. If you are not adequately prepared, you will leave money on the table.
Think outside the box for a while. Really; give it some serious thought:
- Who would be interested in buying your business in the coming years?
- What would they want to buy?
- Does your business have the capacity to excite, simplify, or add security to a new owner?
- How do you get things in the right “place” for them?
- How do you maximise your own value, while enticing the acquiring person / business / group to see the greater future picture?
Those are the current and ongoing challenges for all business owners. Don’t neglect them.