By Antrenise Cole
Birmingham Business Journal – November 16, 2012
The election is over, but even though the results provided some answers, experts say small businesses need to be aware of the events in Washington, D.C., and the potential problems and opportunities they create. Ross Cohen, a partner at Haskell Slaughter Young & Rediker LLC, said business owners should particularly be mindful of the ongoing debate over budget cuts and the fiscal cliff. We avoided a recession, which I think is significant, but we don’t want to fall into a second one, so there’s going to be a lot of discussion about whether to raise taxes and when to raise taxes,” he said.
Duane Donner II, managing partner of Founders Investment Banking, said since the election, his firm has been busy doing transactions with owners who want to re-capitalize their businesses before the end of the year. He said business owners are anxious that taxes would substantially climb in 2013 and uncertainty about the economy would continue. They rather go ahead and make a move while the valuation climate is still feeling pretty good,” he said.
“A lot of the more conservative people who were on the fence are now saying they want to do a deal. The initial indication is that this should really accelerate the mergers and acquisitions market at least for the smaller, middle market companies. Donner said it would be wise for owners of well-performing companies to look into selling all or some of their companies, because there’s a lot of capital in the market for quality companies. “If you have a window that’s less than 10 years out and can do a deal and get a good valuation, I think it would be foolish not to,” he said.
However, owners of companies that aren’t performing well due to the economic downturn wouldn’t be ready for that process and should try to figure out how to get their companies better positioned, he said. Donner said while the political environment does impact businesses, there are multiple factors to consider before doing a deal, including how the company is performing relative to the history of its business cycle; when the owner plans to retire; your industry’s outlook; what’s going on in the economy; and regulatory issues and how they could impact your business.
Lynetta Steed, head of business and community banking at Regions Bank, said she’s telling her small business owner clients to focus on setting their business plans for 2013 and looking for opportunities for growth and expansion. “As small business owners think about what they want to accomplish in 2013, this is a good time take the time to plan and then make sure they’re using their bank as a resource and financial adviser,” she said. With the election behind us and the environment the way it is, it is a good opportunity to take advantage of low interest rates and good deals on real estate.”