Truth or Dare: “2023 Predictions for Sellers and Buyers of SMBs”

Here’s my prediction for wannabe dealmakers during 2023.
(Email me if you want a better-formatted message, than you see below.)

Wearing my tin foil hat, I’ll first cover what I think/hope/expect sellers (and brokers) of small and midsize businesses are going to do. And then I’ll predict how buyers will react.

1. Owners are going to lower the pricing of their businesses for sale. 
   

So they can sell most expeditiously.

2. Business brokers will lower their sales commission by at least 50%. 
   

Because they will sell more businesses most expeditiously.

3. All owners (future sellers) are finally going to get around to hiring the right financial talent. 
   

• So their financial books and records comply with accounting standards.

4. AND, they’re not going to skim or in any other way try to avoid income taxation. 
   

5. BUT, instead of selling, many owners are returning to the “Art of the Deal.” 
   

• For mergers and acquisitions. To BIGLY grow their empire. And then sell at an outrageously high multiple of “profit.” Most expeditiously.

WHAT ABOUT THE BUYERS?

1. Buyers will continue to foolishly compete with one another. 
   

By bidding up prices for the crowds of better-prepared business sellers wanting to sell most expeditiously.

2. Sellers will finance way more of the buyer’s purchasing price. 
   

Because banks will finance less. And, buyers are looking for maximum leverage to maximize their return on investment.

3. Much later, most buyers will realize that understanding cash flow was more important than their copious ROI spreadsheets, which they prepared before completing their deal. 
   

You know; their forecasts. Predicting their potential (colossal) IRR. (Favorite metric of business school students.)

4. “Buyer Remorse” will be a thing of the past. 
   

Antidote: A few days after buying a business, the new owner went to a fortune teller who looked into a crystal ball and said, “Owning your business will be a living nightmare for the next three years.” “Then what will happen?” asked the buyer, hopefully.”

“Then you’ll get used to it”

Key Takeaways Satirical? Ironical? Mostly true? One can hope, can’t one?