Whether you want to buy a business to flex your creative muscles or just to become your boss, it’s crucial to buy at the right time. The most critical performance metric of every business decision is how much return you get on your investment? Following the Great Resignation, many buyers want to enter the world of entrepreneurship. The question, however, is, is 2022 a good time to buy a business?
Besides financial records, there are several factors that prospecting business owners should look out for before leaping to buy a business.
Evaluating candidate businesses based on their financial records is understandable and you should not ignore this. However, that should not be the only consideration because what good is it buying a business only to get tired of it after a few years?
In addition to its financial performance, you should evaluate your interests and ensure that you buy a business you are interested in. You should also seek to understand the business’s business model and assess whether it aligns with your values and desired way of conducting business.
Buying a business is much like buying stocks. Buying at the right time will help you break even and make a profit as early as possible. You wouldn’t want to buy a business only for the economy to retrogress in the coming years, bringing you losses. The ideal time to buy is when the signs of the market indicate that your prospective business has the potential to grow in the forthcoming years.
To help us evaluate that, let’s look back at 2021. Most business brokers witnessed record-breaking closed transactions. The numbers were significantly higher than the previous year. In 2020, the pandemic had cast too much uncertainty, discouraging people from buying and selling businesses.
The economy is improving in 2022 as the world approaches herd immunity from Covid-19. So, most businesses are expected to grow, implying that buying a business in 2022 will pay off.
Fewer people were willing to take up loans during the past two years. This hesitation caused the interest rates on loans to drop significantly. The interest rates are still low, which means that in 2022 you will have access to more capital.
2021 was a seller’s market. However, as the pandemic fades as more baby boomers retire, more businesses will be available for sale, thus making the market even, making 2022 an excellent time to buy a business.
Considering the above-discussed factors, 2022 is a great year to buy a business. However, buying a business is a complex process. As such, it’s best to seek help from experienced professionals.
Our Murphy Business Sales team has an outstanding knowledge level and will help you avoid potential pitfalls and get the best terms on your purchase. Our vast network will also grant you more options.
Are you considering buying a business in 2022? Call us at (727) 725-7090 or (888) 561-3243 or fill out our contact form today to speak with a team member.