In recent times I'd say I was working twice as hard making half as much...now I say I'm working four times as hard making one-quarter as much. Not really, but it often feels that way.
Deals have gotten tough, but not impossible. It just seems like it takes patience and thought at every step of the way and if a beat is missed, the deal is lost.
As Steve McFarland so cleverly wrote today about the humorous video showing the man running after an antelope that was chased-down by a cheetah...
"Oh, I get it…it’s a mixed metaphor!! Let’s see, the forest represents a very hard way to make a living, not much food (deals) to forage, the Cheetah is the hungry agent finally tracking down a buyer/deal (the antelope), so close you can taste the money, when suddenly it’s snatched away at the last minute by an evil landlord or something of the like…am I close??"
Yes Steve you hit it on the head! But it all means we need to do better setup of our deals, better planning while in escrow, exercise patience during the process, and most important be thoughtful at every step. Lean on each other for advice and don't go it alone out there.
Things do seem to be picking up in April after a very slow February and March. But the big deal just are not connecting yet for two reasons: (1) buyers are not willing to pay the 2-3 times annual cash flow in these market conditions primarily because they believe the 2008 results won't show great earnings and because they believe the future of economy isn't promising and (2) the banks are still tight with credit standards and with making loans.
Those two points seem to be improving and perhaps in the next six months we'll see buyers gain confidence and the bank begin to start making loans. In the meantime, we MUST be prepared for the wave that will hit us because the one thing we've learned during these tight times is that there are plenty of folks out there with the 20% down payment to purchase a $300,000 business. So let's go after those businesses with good earnings and encourage them to sell. Pull out those old leads and find the nuggets of gold and let's SELL!
Check us out at www.sellingrestaurants.com