Monthly Update – February 2018 – Preparing for Success in 2018

These positive outlooks are backed by our changing labor force demographics. The Baby Boomers are reaching their golden years, consistently retiring, and looking to transfer their businesses to the next generation of acquirers and entrepreneurs. The number of Baby Boomer retirements is expected to hold steady above the 4,000,000 mark annually through 2028, which can be a direct contributing factor to the number of small businesses being offered for sale. The sheer number of people in this demographic segment should prove to have a great effect on the supply side of the equation. We are going to see an inevitable steady increase in the number of Baby Boomers over the age of 65, and total numbers are expected to reach over 70,000,000 people by 2029.

Another factor that drove M&A activity in 2017, and is poised to continue into 2018, is the declining number of skilled workers available in the labor force today. Many 2017 acquisitions were strategically executed in an attempt to gain talent that was otherwise hard to come by. This type of growth strategy looks good for the early adopters, but does not seem indefinitely sustainable. While the difficulty of finding skilled workers can be felt in many industries, construction in particular is not expecting to see an improvement in this situation for a while. According to a Q3 2017 US Chamber of Commerce report, “Nearly all (91%) contractors are at least moderately concerned about the skill levels of the workforce, down slightly from 94% in Q2 2017.”

• Become a high quality target for acquisition
• Put forth effort into finding and retaining a skilled and competent workforce
•  Develop second level managers that will help your business smoothly transition to a new owner
• Have timely, accurate financial information prepared by an independent CPA