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Stock Market Volatility and the Impact on Small/Medium Size Business Owners and Buyers
| Guest post by: Mike Derrick |
Article Overview: Recent stock market activity has created a sense of uneasiness among small to medium, size business owners attempting to sell their business and has also created a greater awareness of risk among those seeking to acquire such businesses. A down market does not necessarily preclude business sales - volatility, however, as we have witnessed during August 2011, instills an element of uncertainty that can adversely influence the confidence of buyers that have been seeking business ownership and its correlative fulfillment of the American Dream.
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Free Download - Sale of a Business By Mike Derrick |
Stock Market Volatility and the Impact on Small/Medium Size Business Owners and Buyers
Volatility within our stock market has been a natural occurrence during recent decades, but the extreme volatility witnessed thus far in August 2011 mayjeopardize the strategiesforowners of small and medium size businesses thatare seeking an exit. These market conditions may also affect parties that are on the acquisition trail.
Business owners are generally averse to risk (many an entrepreneur may take exception, but they too are increasingly avoiding the uncertainty that start-ups present) - will the recent and now fading perception of an improving economic climate cause business owners to question the sustainability of any recovery during the next several years? Also, what other questions surface as a result of the market's volatility:
- Will the volatilityof the stock market further inhibit sellers from expanding or growing the existing business due to the failure of customers to commit on a long term basis and increase order sizes?
- Will lending institutions further scale back their willingness to assist both the small business owner and the displaced executive seeking to obtain financing?
- How has the volatility affected the 401(k) plans that buyers utilize to purchase a business and has the buyer suddenly withdrawnhis or herpursuit of the American Dream?
The volatility of the stock market createsdire concerns amongst business owners and entreprenuers. Small companies and individuals seeking to acquire a business are less likely tofully recognize the true value of available businesses due to the uncertainty surrounding growth potential. Acccordingly, business owners tend to delay their exit strategy and, at the same time,halt growth plans. Volatility within the markets is clearly harmful - job growth is parked on the sidelines. There must be a reasonable economic outlook, absent repeated periods of market volatility, to promote the growth and transfer of small to medium size businesses to acquiring parties.Small and medium size businesses benefit when there is a perception of stability in the marketplace.
In summary, too many small and medium size businesses desiring to pursue their exit strategy are unable to move forward due to the uncertainty created by the volatility of the markets
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Referred by: http://www.hbgadvisors.com
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About the Author: Mike Derrick RSS for Mike's articles - Visit Mike's website As a solid advocate and proponent for small to mid-size business owners that desire to formulate an exit strategy I, along with the other members of Huntington Business Group, have been very successful assisting clients achieve their objectives. Our unique approach that instills trust and confidence with our clients is primarily attributable to the VentureXchange system that Huntington Business Group introduced in 2010. VentureXchange is a proprietary system that reshapes the typical focus of the business brokerage industry. The specific focus is upon the business owner. The early phases of this system allow us to quickly get a grasp of the business owner's ultimate objectives (i.e. the sale of the business may only be an intermediate step to his/her real objective). We also focus upon a number of other factors to ensure a successful transaction. Savvy buyers look beyond the financial results in order to be certain that risks can be minimized. VentureXchange was designed to anticipate risks and to alleviate these risks. Our system quickly positions the seller and his business for an optimal solution. With more than 20 years of M&A experience in the corporate environment my ability to assist both buyers and sellers in their efforts to fulfill their dreams has been very both successful and rewarding. I specialize in a number of industries, but my experience and that of Scot Cockroft, the owner of Huntington Business Group, allows us to provide the level of professional expertise sought by any business owner. As a graduate of University of Texas at Austin and a long time resident of the state I direct most of my M&A activity within Texas, but many businesses in the bordering states have enjoyed our business acumen for several years. Our success, as we extend our reach beyond Texas, is the result of the national recognition we have received as evidenced by the #1 ranking Huntington Business Group was awarded for being the most successful business brokerage firm in the VR Network for 2010. At the same time the Dallas Business Journal recognized Huntington Business Group as 2010's Dealmaker of the Year. These accolades are, of course, very rewarding to our firm, but more importantly, they reflect our commitment to the client. Click here to visit Mike's website   Selling a Business Where Does One Begin Stock Market Volatility and the Impact on SmallMedium Size Business Owners and Buyers An EarnOut May Seal the Deal Sale of a Business Buying a Franchise The Right Decision |
Related Forum Posts
Re: Do Women Play the Stock Market?
- I also play Stock Market.....
A ton of Great Women
- You might want to profile Teresa Cascioli of LakePort Brewery. She has an amazing story! I met her at at the celebratory luncheon for the Profit/Chatelaine Top 100 Women Business Owners. The Top 100 list is also a great resource for inspirational stories of Women Entrepreneurs.
Re: Ideas For Business
- Hello Lucy,
you may consider this list for Ideas for Business: (Top 23 list)
Rank Company
1 Google
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Re: Do Women Play the Stock Market?
- Thankfully, I do the finances in our household so there will be no surprises here! I cannot imagine not knowing what is going on. (In case you're wondering, my husband and I do consult with each other about major purchases though.)
Until recently, I've only played a little in my RRSP's. I can't say I made any huge gains. I've done much better in real estate. My sister has done really well trading her RRSP's in penny stocks and if I remember correctly, she recently doubled her money in only a year.
I'm hoping to change my own Stock Market record though! I got in on the ground level of a new green energy company in BC. It began as a private offering at 50 cents a share and now is offered at $1 a share only 3 months later. It's selling like hot cakes and will be closed to sales by the end of April (if there are any shares left). It was just evaluated by an independent company at around $6 a share. The company plans to be on the TSX this year and I expect to make a good return. Wish me well!
My entry
- 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read
- this is a fascinating book about the history of Business theory, and I'd recommend it to anybody.
2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto.
3. PADI: The Business of Diving Book
Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
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