The Cloudy Crystal Ball

In working on the cover story for this issue I came across what I believe is an unusual wrinkle in the entire matter of planning for the future of a business. Although committed to the concept of scoping out what lies ahead in their markets and taking appropriate action in advance, a lot of business owners are having problems doing that. They don’t have a handle on what’s in store past the next two years or so, and that is prompting a lot of them to put their businesses on the sale block. Fortunately for them, many other conditions that, as our investigations determined, support a timely sale are jelling. So it seems like an ideal time to cash out, even if it may seem premature given the proprietor’s age, career plans, and company longevity. Nevertheless, a high volume of exits based on cloudiness in the crystal ball may be a new force in the deal flow. Most owners know that economic and business trends don’t run in a straight line, but historically they have been willing to weather the rough times so they can flourish when the years are lush. It’s hard to tell this early in the cycle what this means. But if it’s a sign that the tough times are harsher and the good times less generous, that has to be a force for dealmakers to consider. It could, for example, mean that businesses may be readied for sale at earlier stages of maturity because owners can’t take the gaff on holding on too long. That could have widespread, if as yet undetermined, implications for changes in the deal flow, pricing, and buyer growth plans, among other market elements. Martin Sikora Editor Copyright 2005 Thomson Media Inc. All Rights Reserved. http://www.thomsonmedia.com http://www.majournal.com