The following is from The Keene Sentinel
By Anika Clark
Sentinel Staff
Published:
Saturday, November 22, 2008
The national news is filled with stories about businessess - and the people who man them - drowning in a choppy economy.
With all this activity, business brokerage firms report they're comfortably above water. But some say the strength of their sector isn't the result of more people wanting to jump from the self-employment-ship so much as a swell of people looking to climb aboard.
"This has been actually one of our best years." said Brattleboro-based Philip H. Steckler 3rd, vice president of the New England firm Country Business Inc. "Every good business, viable business, that I've had out of here, we've sold."
Richard H. Thackston 3rd, president of Keene-based Century 21 Thackston & Co., echoed him.
"Business brokerage has been pretty good...in the last six months," Thackston said. "Sometimes when people see that their middle management job, or whatever, is likely to go away, they typically start thinking about what else they can do."
"Where regular employment goes away." he added, "people look for other, more creative , ways to earn a living."
Pamela J. Lynch, vice-president of Leonard Lee & Co. - an Amherst commercial real estate and business brokerage company that covers Southern New Hampshire - similarly described how that sector can be stimulated by a floundering economy.
"I think it's driving business more," she said. " There's more buyers looking to buy businesses."
Basically, she said, many people are looking to "buy themselves a job."
And with recent announcements of massive upcoming layoffs at firms such as Fidelity Investments, which employs New Hampshire workers at its Merrimack location, she said this trend's going to continue.
"A lot of those people are going to be thinking about buying a business and we've already been contacted by some," she said, referring generally to people emerging from corporate layoffs.
Also starting to notice an uptick in people interested in business ownership is Gary W. Oden, who works with prospective and veteran business owners alike as regional manager for the Keene branch of the N.H. Small Business Development Center.
Oden's encountered newbie business owners entering everything from the baking to pet grooming fields, and he said he had one client who saw entrepeneurial opportunity in converting trucks into hybrids.
Still, he said, he generally sees a rise in people looking to be the masters of their own business destinies between summer and fall - in part, he explained, because of psychological tendency to view September as a "new beginning" - and said this season's uptick doesn't seem too much greater than any other autumn.
"We're seeing a bit of an increase in activity, but I can't attribute it necessarily to the economy," he said. "I would have thought that if it was really the economy, you would have seen a tripling of the calls to come in, and we're certainly not seeing that."
Regardless, Keene residential and commercial real estate broker Moe Mozier of Re/Max Town & Country, said his work as a business broker has been "fairly active" even as residential real estate has "slowed considerably."
"Most of everything I've done in the last two or three months has been commercial," said Mozier, who said he's already seen the bad economy act as a catalyst for new business ownership and expects this to continue.
Specifically, Mozier predicted career-changers will be drawn to his bread-and-butter sector- the notoriously risky realm of restaurants- because of a lifelong dream or the assumption that owning an eatery doesn't require the same level of education as being a plumber, electrician, lawyer or doctor.
Everyone tends to think they can run a restaurant, he explained, and new owners often hire staff who know more about the field than they do.
The result?
"The tail wags the dog," he said, "and they're out of business."
But when novice restauranteurs are out of business, Mozier's in, since he works on behalf of both buyers and sellers. While Mozier said it's too early to notice any trend in his own business, he said that given the challenges facing restaurants in today's economy, "There's no question, there's downturn....There'll be more on the market."
Lynch, of Leonard Lee & Co. specializes in selling smaller "mom and pop" businesses ranging from hair salons to convenience stores. She also sells the assets of closed companies, including restaurants, where the assets can represent greater value.
"There's always restaurants that fail and close down for one reason or another," she said. "I can't say that there's an increase in them," she said.
But the future, she predicted, will be a different story.
"I think we'll see more restaurants probably coming on the market as assets," she said. "When the economy was hot here...some things were overdone. There were probably too many restaurants- too many pizza places- that were opened in certain areas. There's just too much competition."
Meanwhile, she said, businesses that are staying afloat are opening additional locations.
With commercial real estate prices coming down in recent years, she explained, "It is a good time for them to expand because they can get into a different market at a lower cost."
Donald F. Giancola, executive vice-president of Country Business Inc. - which provides business brokering through its Portland office to Maine, the New Hampshire Seacoast and Route 93 corridor- said he's seeing more acquisitions of smaller companies.
Giancola, who said his office's usual load of 15 completed transactions annually has remained stable, cited the economy as one possible reason he's seeing this trend.
"If a company's having a difficult time growing because it's in a market area that has not done well, then it's easire to grow through acquisition," he said. "They can either expand geographically, or they're expanding through a product line extension."
Like Giancola, Steckler said his rate of completed transactions has stayed steady during the trying economic times.But, he said, he's having to work harder to find for-sale businesses that meet his company's success standards to take on as clients.
"What concerns us as a company," he said, "is if we're not seeing any product for sale, or very little product for sale, what happens next year?"
Still, Steckler was one of several brokers who said their sector is afforded stability since some of the key factors that lead people sell their businesses- such as boredom, burnout, divorce, retirement- remain fairly constant through financial highs and lows.
"Frankly, I think that you're going to have an opportunity over the next few years for buyers and sellers simply because so many business owners are baby boomers," according to Steckler.
"There are a lot of businesses out there. This economy may weed some of those out...but the criteria that makes people want to sell is still there," he said. "You're not going to live forever, and you're not going to own your business forever."
