Today, banks are toughening up terms, some have temporarily suspended lending. They require more collateral and owner carry in business sales. Lack of readily available debt financing has created big liquidity issues for stable, profitable businesses. Consumers are drawing back. Business owners are examining hole cards and doing strategy planning for better and for worse. Owners are battening down hatches, waiting to sense economic direction.
The right business strategy positions a business to survive these turbulent times. Bluestem’s Business Wealth Counsel TM advisors are prepared to work with business owners in these fundamental areas for surviving difficult times.
• Refocus strategically
• Control costs aggressively
• Assess suppliers and customers
• Improve operations and efficiencies
• Evaluate capital spending
• Improve banking relationships
• Enlist experts to help
• Use credit enhancement for financing
• Protect your business wealth
• Remain calm
Savvy owners have called in specialists to guide operating and productivity improvements, cut costs, seek new lenders, enhance credit, or sell their business while some very good options remain. In fact, there are great opportunities available to those who know how to make them happen. Owners are looking at strategic alliances and combinations through mergers or acquisitions. Corporate refugees are actively buying businesses so they can work for themselves to control their own job security and investment returns. PEG’s are sitting on cash for acquisitions that make sense in today’s world. Debt options are shrinking.
According to a recent survey, in the current economic situation, buyers remain positive;
• 48% see advantages in buying a business.
• 28% consider buying a business a safer investment than equities or real estate.
• 36% find businesses more competitively priced.
Today's destabilized market conditions pose true threats to business owners nearing retirement or seeking a successful exit. Those who were indecisive or procrastinated during the heyday of the past decade may face declining values over coming years. They must wisely weigh the costs, difficulties and risks required to weather one more economic turnaround, versus cashing in today. Others will wonder if they can ride things out to catch an uptick as the storm passes, although many reasonable folks believe we are at the front of this storm, years from the end. As with tornados we have in the Heartland, riding it out may be exhilarating or it may prove fatal.