Southeast, USA…The Place to Buy a Business
By: Michael Fekkes, CBI - ENLIGN Business Brokers
There have been a large number of articles and blogs published over the years anticipating a sharp increase in the number of small businesses for sale as the baby boomer generation retires. Some forecasts are as high as 750,000 businesses owned by baby boomers coming on the market, a fifteen-fold increase from 2001. With fewer buyers available in the X Generation, supporters of this phenomenon project that selling a company at a good price will become more difficult in the coming years. This scenario is anticipated to have an impact on the market but probably not necessarily across the board. Owners of businesses that have three or more years of positive earnings, with clean and organized financial statements, will be well positioned. Having an exit strategy in place, preferably years in advance of a planned sale, will be necessary to maximize the value of these transactions and therefore it will be critical for owners to engage an experienced business broker early in the process. Buyers in today’s market are very savvy, placing even more emphasis on obtaining the proper representation from an intermediary who is able to perform a business valuation, create a comprehensive marketing plan, pre-qualify buyers, and perform contract & terms sheet negotiation, all in the strictest of confidence.
I can definitely appreciate the increased interest in acquiring a small business here in the Southeast region, having lived in many of the states including North Carolina, Georgia, South Carolina, and Tennessee. The increased demand for purchasing successful businesses here in the Southeast was a component to the phenomenal year that ENLIGN had in 2009 finishing with a record number and value of transactions. While the national economy is still recovering from the recession, the ENLIGN model of coupling an experienced transaction team and professional partner program with a proprietary confidential marketing methodology proved very successful and resulted in a record amount of business. The clients represented by ENLIGN was a key component to the company’s success. ENLIGN’s model of representing profitable, privately-held companies with revenues in excess of $1,000,000 enables ENLIGN to represent very successful companies who are often the leaders in their local industry. The number of buyers seeking to purchase successful and profitable businesses here in the Southeast region is significant. ENLIGN’s extensive database of qualified buyers in addition to our highly regarded network of industry partners remains instrumental in completing successful transactions.
Although the United States is still coming out of a recession and the majority of all markets are still sluggish, it is projected by many that the Southeast region will perform extremely well for the next several decades. The gradual population shift here in the U.S. is expected to significantly benefit the Southeast region. The low cost of living, exceptional fundamentals for businesses, and mild climate, has created a tremendous amount of interest from entrepreneurs, private equity groups, and corporations looking to acquire a business. Raleigh, North Carolina has been the fastest growing city this century among America’s largest municipalities. Population figures for 2009 has Raleigh growing at a faster rate from the year 2000 than any of the other cities among the nation’s 50 largest. The state of North Carolina is forecasting that nine of the state’s eleven economic sectors will experience increases during 2010. The strongest forecasted sector is services with a projected increase of 5.7 percent. All three of the other North Carolina cities, listed among the United States’ 85 most populous, posted double-digit growth for the decade 2000 to 2009. Winston-Salem recorded 24 percent growth, Durham saw a 23 percent increase in population and Greensboro had a 14 percent increase. Although the state of Georgia was hit somewhat harder by the economic recession, the large expansion and relocation projects by the Georgia Department of Economic Development coupled with the above average population growth will continue to be key factors in Georgia’s economic development. Neighboring Tennessee is also anticipating positive growth. According to the Tennessee Business and Economic Outlook “By 2011 the employment situation will have stabilized and the year will produce job growth of 1.8 percent. Education and health services are likely to be the key drivers in the services sector here in the ‘Volunteer State’. Even the state manufacturing sector will have new-found life in 2011 with employment advancing 3.0 percent—the first gain since 1997.”
Michael Fekkes is a Senior Broker at Enlign Business Brokers in Nashville, TN. Michael is a Certified Business Intermediary CBI®, a member of the International Business Brokers Association IBBA®, as well as a former business owner. He can be reached at 910.691.2202 or mfekkes@enlign.com. Enlign Business Brokers (www.enlign.com) is a Professional Services Firm serving the Southeast that is headquartered in Raleigh, NC with regional offices in Nashville, TN and Atlanta, GA. providing business intermediary services ranging from valuation and sale to exit & succession planning strategies.
