This will have a significant impact on Buying or Selling a Business: (1.) The Decision Making Process, (2.) The Valuation of the Business and the Price you will pay now, or pay later , (3.) How a Target Acquisition will be a Big Winner or Loser due to Significant Rise in Inflation. Consumer Price Inflation is Coming to North Carolina in the near future.
Consumer Price Inflation is not just Coming , it is already here- but in small pieces so that it’s not impacting you at every level – yet!
Under the Radar? Only Barely.
Lumber is up 300%. If you look for a quote on a new or repair/restored deck – the quote will shock you! I had all my porch railings replaced on my 25 year old home last year – $5,000. (2020). It would have been $3,500 in 2019, I still have the quotes. Today ? $7,500-$13,500 was my range !
This says, “if you are looking to buy a home improvement related business , for just one example: forget the “Old Multiples”, like 3X.
As a Business Consultant, my help can save you tens of thousands and only cost you tens of hundreds.
Example ? One of my Buyers with whom I am consulting just got an accepted offer on a trucking company listed for $20 Million and I would have appraised it higher based on the fleet, and last five years of financials. Why did the Seller accept our OFFER of $10 Million?
What does he know that you do not? Or perhaps I should say, “What is he experiencing right now? “ EXTREME Shortage of drivers ? Fuel prices destroying margins? And the forecast ahead ? MORE AND WORSE!
A Buyer’s Rep. Can Advise on both sides of this equation. Both Buyer and Seller Benefit.
Had the Buyer not consulted ProbBiz, he would have over paid by millions of dollars.
Why still do it? (1.) At the price he bought in, he is covered.
(2.) His loan is a reverse inflation, locked in ridiculous low percentage !
(3.) WITH INFLATION, his $10M may be only $5M – dollar for dollar – over time. How cool is that?
(4.) And he will immediately raise his prices and restore the margins, he says.
(5.) Trucking isn’t going away. It is a needed fundamental – owning a great trucking company is a WINNER in the near term and likely in the longer term too.
Here’s the Truth about Inflation:
Our country prints money. It’s called “Fiat”
That’s because it is backed by nothing but a good faith promise.
It is supposed to be in balance with our Revenues, etc.
But it has not been in balance for so long that “the chickens have come home to roost”.
2021? 2022, 2023….
Many say that this Inflation will make 2008 look like a Girl Scout Cookie Drive. The would “Trillion” is now so commonly heard, we have grown numb. But the number “Trillion” is mind-bending if you try to write it, do the math or imagine it in any normal context.
I heard it expressed this way: “when the money goes funny, everything goes funny. First, things get weird. Then, they get nasty.”
My point here is not to cast aspersions. Nor to discourage ownership in business. Just the opposite.
You can adjust to mind-bending moves of Inflation – and owning your own business gives a heck of a lot more control than being a corporate employee. Both are needed and the world is not coming to an end. The question is how well will YOU fare?
But that is all still ahead – the consumer price inflation… the financial controls… the depression… the crack-downs… and the crack-ups. The first two of these five is already somewhat upon us and ratcheting up, it would seem. Lets us help you in the key area of Income and OPPORTUNITY !