Not as rough as 2020, but 2021 was no picnic for many people and businesses. Supply chain challenges, microchip shortages, cyberattacks, inflation, and labor concerns dominated many conversations in the board room and at the dinner table.
Perhaps it’s wishful thinking, but it appears that many of the top business minds in the United States are feeling more optimistic about 2022. According to a survey by YPO of 1,700 CEOs in 101 countries, things may be looking up: 37% reported a 20% increase in revenue or more since the beginning of 2021; and 45% said their total head count is about the same as it was in early 2021.
Despite the positive tones on revenue and head count, these same CEOs are not as optimistic about supply chain issues, hiring, inflation, and ever-evolving customer needs and expectations. Interestingly, only 1% of these top execs believe that employees are more productive at home, but 74% believe that some form of flexible work arrangements will become permanent. Another trend is employers opting to add mental health options to employee benefits packages to help them cope with pandemic related stressors.
Now let’s shift away from wealthy CEOs and find out what “Joe Average American” is thinking. Per the U.S. Census Bureau, 2.5 million individuals are still hesitant to re-enter the workforce because of the virus. Another large slate—estimated by the St. Louis Federal Reserve to be nearly 3 million—has retired early. Finally, a third cohort is reassessing their work/life balance. This dynamic has been aptly named the “Great Resignation”.
So, what are buyers and sellers of businesses to do for a strong 2022?
Sellers: Stick with the fundamentals. Cash flow is still king, quality employees will always matter, focus on your digital assets (website, social media, etc.), and make contingency plans to your contingency plans on what you will do…if.
Buyers: Interest rates are still low and while pandemic-proof businesses are going fast (and at top dollar), there are many businesses out there that have taken a hit in the last two years but are still relevant and willing to sell at a reasonable price.
If you’d like to talk about your 2022 goals for buying or selling a business, contact us for a confidential discussion. We look forward to helping you reach your goals.