In light of the president’s first “State of the Union” address, it makes sense to consider the “State of the Triangle Market” for business deals. There’s a lot happening nationally, and we live in a very hot market for both real estate and business transactions. “We the people” of the Triangle are fortunate to have the resources and opportunity in the strong market we are currently enjoying.
As a Triangle area business broker, I have a finger on the pulse of the local market, and there is indeed something happening in regards to the volume of opportunities and interest for executing deals on small to medium-sized businesses. I’ve seen new businesses go-to-market and get record numbers of inquiries; primarily from business buyers living in the Triangle, but also from regional markets like Charlotte, Greensboro, & Wilmington, and to a lesser extent out of state buyers.
I believe the 4 reasons for the heightened activity are as follows:
1Investing in businesses is a viable alternative to the stock market
The stock market keeps hitting new records and buyers are uncertain that it will continue to go higher. While everybody loves seeing big numbers, but eight to nine years of a bull market just feels too good to be true when we’re used to a correction every four or five years. I think a lot of investors are moving to cash and looking at business investments for ROI over passive investments in the stock markets.
2The secrets out on the Triangle
With 62 new people per day moving to the Triangle, commercial real estate projections are strong for next year according to research from NAI Carolantic, a local leading commercial real estate firm that presented their annual forecast recently at the 33rd annual Triangle Commercial Real Estate Conference to business leaders at the PNC Arena. With real estate being the harbinger of business to come, a strong real estate market bodes well for a strong business brokerage market.
3Money is still affordable, but for how long?
Again paralleling the real estate market, the state of business brokerage is tied to how affordable money is. Business buyers have been fortunate to have access to affordable rates since the recession but with the economy doing so well the Federal interest rate is starting to be raised so there may be a sense of “Get it while you can…” This isn’t a Triangle market trend but a national trend.
4Shortage of quality product on the market
There are more buyers than sellers of quality businesses. Strong, transferrable small businesses that are cash flowing $100,000+ are difficult to find, and business owners like Drew Schenck who recently sold Cary’s RallyPoint Bar and Grill are enjoying favorable multiples, and multiple offers if they’re taking them to market because business buyers simply don’t have a lot of options out there.
And so, my fellow Triangle residents, it is my opinion that the state of the business brokerage market is strong! We’re all very fortunate to live a market that responds well to a favorable economy with the resources, the people, and the opportunities to live the American dream of entrepreneurship.
Neal Isaacs, MBA, CBI is a Business Broker and the owner of VR Business Brokers of the Triangle, located in Raleigh, NC. He writes about business and helps business owners discover their exit options.