Economic Outlook for Small Business - Mid-Year 2018
By Andy Kocemba
Following the recession and eventual recovery, economic indicators are finally showing that the small business economy has returned to normal. Currently, small businesses are seeing one of the strongest economic outlooks in recent memory, and I believe business owners are feeling comfortable in a way they haven’t in many years. They’ve weathered the storm and are finally being rewarded with increased valuations, cash flow and growth opportunities.
For example, the Small Business Index, developed by the U.S. Chamber of Commerce and MetLife, has been on the rise for five consecutive quarters. Nationally, numbers are high, but the Midwest in particular is showing impressive growth, with most small business owners rating the health of the national economy as good and 87 percent saying their cash flow is also good. Small business owners are also expressing a high sense of optimism and reporting excitement about investing in their businesses.
We’re seeing these trends reflected in the Minnesota mergers and acquisitions market, which has begun to stabilize and return to its usual ebb and flow. Owners now feel safe with holding on to a business while times are good, while prospective buyers continue to be on the lookout for profitable businesses to purchase.
In my experience, a higher number of deals is the main indicator that the economy is doing well and buyers and sellers are feeling confident, and we’re seeing that happen now. For example, we helped sell 36 businesses through the first half of 2018, a whopping 30 percent increase from this time last year.
I'm confident that we will see a stable market through the end of 2018, particularly as small businesses continue to see improving financial performance.
- Economic indicators are showing this is one of the strongest economies in recent memory.
- The Minnesota M&A market has stabilized from the recession and resumed its normal ebb and flow.
- Owners now feel safe holding on to and growing a business, while prospective buyers continue to be on the lookout for profitable businesses to purchase.