— January 5, 2019
If you plan to start, buy, or a sell a business in 2019, it will be more important than ever to understand the landscape as technology and political factors continue to change the way businesses run. Read on for an outlook on how technology, the economy, and the political landscape will affect buying and selling businesses in 2019.
Technology is important; the human touch is irreplaceable
Technology has been the biggest game-changer in almost every aspect of how businesses operate, interact with customers, sell products, track inventories, and more. While there are nearly uncountable ways that technology can aid your business operations, processes, and interactions, with an increasingly automated and robotic world, the places where you can insert a human touch is invaluable. This is best utilized in a closer touch point, usually the customer service aspects of your business. Whether you sell directly to consumers or are in business-to-business sales, any opportunity to really interact with your customers at a level that’s meaningful to their business will be a differentiator in 2019 as businesses continue to automate.
We are not saying automation is uniformly a poor choice, but rather finding the most impactful interactions to maintain on a human-level will become increasingly important to customers.
The political landscape may help the economy and business owners
The current administration places high priority on reducing regulations in hopes that it will help pump more money into the economy with less restrictions on how and where funds can be spent. Additionally, as financial author Mark Thornton notes, the incoming congressional gridlock, with the democrats taking control of the House of Representatives, will also give way to positive effects for small businesses.
This could be very good news for business owners in 2019. Not only will the regulations continue to incentivize consumers to spend, but the stalemate that congress will likely find itself in will help the economy with each party being able to moderate the other. This prohibits policies that are too far on either side of the spectrum from being passed, and the checks and balances help keep a healthy and moving economy.
A strong job market puts emphasis on employee satisfaction
The unemployment rate in 2018 dropped to a remarkably low 3.7 percent, and The Balance predicts that trend will continue in 2019 reaching 3.5 percent. A strong job market means unhappy employees are more likely to search for another, more fulfilling, job. This may mean businesses looking to hire may need to offer higher wages, better benefits, and a positive professional culture. If you’re in the market to buy a business in this economy, current employee retention will be important to a smooth transition, and the threshold for what constitutes a happy employee may be higher than in recent years.
Banks are opening their checkbooks
Economic confidence will make it easy for small businesses seeking financing in 2019 to get a loan approved at a low interest rate. In fact, coming out of 2018, small business loan applications have seen approval marks and interest rates that are matching those seen previous to the 2008 recession. In November 2018 alone, over half of all small business loan requests were approved.
This is beneficial for those looking to buy or sell (or both!) a business in 2019. Those who plan to buy a business will have less trouble getting a loan approved than in previous years, and at a low rate. Additionally, anyone who may sell their business in 2019 will have a wider range of potential buyers. Those who may have been rejected by banks in years where they were being more stringent about who they would lend to may be more likely to have their loan request approved in the year to come.
2019 may be a great year to buy or sell a business
All indicators point to 2019 being one of the best in recent history to buy or sell a business. With banks happy to loan money, buyers will be able to get the loans they need at preferred rates and sellers will have a wide net of potential buyers. Additionally, ongoing deregulation will make it easier for this strong economy to continue in an upward trajectory. Furthermore, in the political landscape, 2019 will bring a divided congress for the first time with the current administration in power. This will limit either party’s ability to pass legislation that is too far right or left, and a moderate government is great for small businesses and the economy. If you’re considering buying or selling, 2019 is looking to be a great year to do so.