The Best Time to Buy a Small Business

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us…

— Charles Dickens, A Tale of Two Cities

The words of the great Charles Dickens ring true in the uncertainty of today…

As the world marches on toward a million cases of COVID-19 — and the death toll continues to rise — the fear and uncertainty in the market remain.

Governments and banking bodies have jumped into action, pumping trillions of dollars and other currencies into the markets — and directly into small businesses.

Today I want to look at what that means to a small-business buyer, aka dealmaker like you and me.

I look at it this way…

Right now is either the best time — or the worst time — to buy a marginalized business. Like a restaurant.

Or services with recurring billing… like a gym, for instance.

Gyms usually add tons of new customers in the busy spring — before “beach body” season. But customers can’t even get into the gym right now in most countries.

Movie theaters have been shut down, with new releases now offered directly on various streaming services.

And the list of businesses in similar situations goes on…

So — when it comes to buying any of these businesses, is it the best of times or the worst?

No Time Like the Present

On the “best of times” side of the ledger, valuations will never be lower. Businesses experiencing hiccups as a result of the global lock-in will mean rough-looking financials.

The fundamentals might not change… but the conditions around them sure will.

Which means right now you can lock in a business with good core mechanics at a strong discount.

And sellers will want to get out of their businesses… frustrated at the thought of fighting one more headwind — right when they want to retire.

That’s a huge upside for us.

Remember, we’re looking for motivated sellers of good businesses. Distressed sellers, not distressed businesses.

Distressed deals are a whole other topic… (More on how Carl and I like to handle those in future issues.)

The Day After Tomorrow

On the other hand — no one has a crystal ball.

Neither I, nor Carl, nor you, nor any of the talking heads on TV have ANY idea when the collective uncertainty, travel restrictions, closures, etc., will end.

For businesses with good momentum, it can be hard to see exactly when, or even if, they will slow down or see a dip. There may very well be some long-tail lags for good, strong businesses.

And overcommitting yourself at the “worst of times” could make things difficult…

You don’t want to be distracted thinking about the businesses you own while worried about your own day-to-day survival

So what is a dealmaker to do?

Look to the Future — With an Eye on the Past

In 2008, the world saw a devastating lock-up of the financial markets as a result of the subprime mortgage crisis (and a slew of smaller reasons).

Like many people, I was negatively impacted. My retirement investments suffered… my real estate holdings… and so on.

Now we’re in the middle of another period of uncertainty, with similar economic consequences. So what lessons can we learn from 12 years ago that can guide us on our dealmaking journey today?

ONE — Remember, opportunity waits for no one. Not even the Warren Buffetts of the world. You’ve got to strike when the iron is hot.

TWO — You need to arm yourself with the best possible knowledge you can to seize the opportunities that present themselves today… tomorrow… and in the coming weeks and months.

Still not polished off your dealmaker training? Then dive in while you’ve got limited distractions from the world around you.

Don’t have access to our training? Then start here now.

THREE — Don’t be afraid to take action. Just look at Warren Buffett…

In 2008, he saw a winning opportunity and took the plunge. Buffett gave a $5 billion convertible note to Goldman Sachs and he made $3.7 billion in profit in just three years.

That’s a 74% return. Not bad.

I’m not suggesting you take this philosophy and pile your money into stocks. I am suggesting you be ready to act when the timing is right.

Don’t let analysis paralysis slow you down. Some caution is wise, but too much indecision isn’t good for anyone.

Take charge, seize opportunities and make hay when you can.

Remember… we are DEALMAKERS. We make deals happen.

So review your training. Or get a jump-start and enroll in the fast track to finding incredible dealmaking opportunities.

Because I say we’re in the best of times — for learning, growing and generating lasting wealth and prosperity.

Are you ready to change your life?

You’re only one deal away,

Adam Markley

Adam Markley
Co-founder and publisher, Dealmaker Wealth Society

P.S. We live in interesting… and confusing… times. So of course you have questions. That’s why Carl and I are hosting another LIVE Q&A session on the Dealmaker Wealth Society YouTube channel this Friday at 11:00 a.m. ET (4:00 p.m. GMT).

Check out last week’s live Q&A here, and be sure to subscribe to our channel so you get a notification when we go live on Friday…

See you then!