Small Business Outfits

The modern editions of friendly senior doctors and businessmen in Stockbridge – a favourite subject of Normal Rockwell’s paintings are discovering to their dismay that all plans about retiring by selling off has to kept on hold; maybe abandoned altogether.

David Keator of Keator Group explained that the main issue was not a drop in the value of their modest businesses but the hesitation of the banks to advance money. In a particular case one of Keator’s clients, a dentist, was told by the bank that he would have to keep 40% interest in the business to be able to sell it. The bank would grant only up to 60% of the price that a young dentist was willing to pay for it.

This is happening everywhere in the world of small business. It is leading to widespread regret about not having sold their businesses timely – when the chance was there. Steven H. Goodman of SHG Financial Group said, “People who wanted to sell their business three years ago are somewhat regretful. But most of the people I know in those situations are working hard to run those businesses and keep them going”.

Various types of small businessmen from doctors to car dealers and manufacturers are now taking hard decisions as to how to harvest the fruits of hard labour put in for decades. Banks are laying down strict standards. This is making it difficult for the sellers to find buyers with cash to at least finance part of the deal. It is not the best thing to get paid back during a long time particularly for those who want the fund immediately. But often the sellers hardly have any choice. They are either suffering from illness or are plain and simple fatigued; it also could be there are either no children or those of the next generation are unable to take on the family business.
Barbara Taylor of Synergy Business Service said, “One of the worst things that happens is they take their foot off the gas the business decreases in value”. She explained that by hanging on to the business no good is being done. In such instances it is wiser to let go and sell it off rather than wait till it becomes a white elephant.

Ultimately how the owners of small business concerns manage this tricky issue is going to have a massive impact on the wealth level of the nation in the long run.

Related tags

  • banks hesitant
  • shg financial group
  • why are banks hesistant to lend to small businesses
  • small businessmen
  • small business for sale
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