Time to Sell? Maybe (Part 4).

Supply chain issues have plagued business owners since the onset of the pandemic. While some of these issues have resolved or are improving, they are making business management increasingly difficult. These challenges may present a good time for some business owners to exit.

Supply Chain Issues

In addition to the macro economic and employment trends discussed above, the simple logistics of inventory, shipping, travel, and scheduling have been aggravated by the pandemic. It is becoming harder to manage and forecast all aspects of a business’ operations.  

The rise of globalization beginning in the 1990s left the United States with a fragile, largely internationally dependent supply chain for many goods and services that are critical to the American economy. This system has been pushed to the brink during the lockdowns and restrictive policies imposed during the past two years. The cost, duration, and reliability of all products and services has been exacerbated.

In many cases, business owners are unable to accurately estimate prices or availability internally or for clients. This lack of visibility is causing disruptions to operations and making it impossible to create and meet budgets. 

Efforts are underway to restore domestic production of key industries (such as semiconductors) and to improve infrastructure (including ports and rail). These efforts, however, will take years or even decades to complete. In the meantime, business owners will continue to struggle with acute issues surrounding the pandemic for at least another year and some consequences for years beyond. To avoid continued struggle, many business owners may choose to exit now while markets accept and tolerate a certain amount of supply chain disruption.  

Conclusion

Owning a business can be an incredibly rewarding and lucrative endeavor. Most business owners enter into entrepreneurship to not only earn a living, but to create long-term value for themselves and their employees. This inevitably means some type of sales transaction, and, while the timing may never be perfect, indicators are blinking that now may be the right time.