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  • Writer's pictureMartin Piskoric

Is Now the Best Time to Buy a Business?

Guest: Richard Parker


Richard Parker, seasoned M&A expert, sharing insights during a podcast interview on the current opportunities in business acquisition.

In an insightful podcast interview, seasoned mergers and acquisitions (M&A) expert Richard Parker sheds light on why now might be the best time in decades to buy a business. With nearly 35 years of experience in the field, Parker discusses the current market dynamics, the challenges prospective buyers face, and offers invaluable advice for those considering business acquisition.


The Shift in Market Dynamics

According to Parker, the current economic landscape presents an unprecedented opportunity for prospective business buyers. Traditionally, it has been a seller’s market due to a shortage of good businesses for sale. The ratio of buyers to sellers has often been about 15 to 1, making it tough for buyers to find favorable deals. However, recent economic shifts have changed this dynamic.


Why is it a Buyer’s Market Now?

Several factors have contributed to the shift towards a buyer’s market. Increased interest rates and higher costs of capital have made banks more cautious about lending money for business acquisitions. This has led to a decrease in the number of buyers in the market, giving more leverage to buyers.

Parker explains, “Sellers are not in the position that they were a number of years ago, where if they put a good business onto the market within 30 days, very often it went under contract. Now there’s less buyers.”

Lessons from a Veteran Business Buyer

Parker’s journey in the world of M&A started from a need to recover financially after a significant loss in the stock market. His decision to buy a business instead of starting one from scratch led to a successful career that includes the acquisition of 13 businesses with enterprise values ranging from $50,000 to over $200 million.


Finding the Right Business

One critical piece of advice Parker offers is the importance of aligning the business with your skillset. He emphasizes that the right business is not just one with solid fundamentals but one that matches the buyer’s greatest expertise.

“You have to really get in tune with what is the right business for you... Whatever it is that you do best has to be the single most important driving factor of the revenue and profits of any business you consider purchasing,” says Parker.

Common Mistakes and How to Avoid Them


Focusing Too Much on Financials


Parker warns against focusing excessively on financials. While they are important, he notes that financials are typically the easiest part of the equation to understand. “The financials are math. I mean, they are or they aren’t. And so you look at the financials and they make sense, or they don’t make sense,” he says. Instead, he suggests that buyers should focus on understanding the business's operations and potential risks.


Searching for the Perfect Business


Another common mistake is the search for a perfect business. Parker stresses that no business is without flaws. “Every business has blemishes and warts. And so as long as you can mitigate those risks, then you have to be able... if you can’t get over the fact that there’s going to be some element of risk involved... that’s the life of an entrepreneur,” he advises.


Real-Life Success Stories


Parker shares inspiring stories of individuals who successfully navigated the business buying process. One such story is of Don Wilson and his son Anthony, who started with a $30,000 investment in a candy store in Oklahoma and eventually sold their business for over $6 million. Another example is Mike Miller and his partner Iggy Domagowski, who started small and built their business to over $200 million in revenue, ultimately selling for over $100 million.


The Importance of Knowledge


For those considering buying a business, Parker emphasizes the importance of knowledge and mentorship. He suggests finding someone who has successfully navigated the process and learning from them. His website, richardparker.com, offers a wealth of free resources, including reports, guides, and articles that cover various aspects of the business buying process.


Key Takeaways


1. Current Market Opportunity: The shift in market dynamics presents a unique opportunity for buyers, with less competition and more favorable terms.

2. Alignment with Skills: Choose a business that matches your expertise and strengths.

3. Avoid Common Pitfalls: Don’t over-focus on financials or seek a perfect business; understand and mitigate risks instead.

4. Leverage Knowledge: Equip yourself with knowledge and find mentors who have successfully bought businesses.



If you are considering buying a business, now might be the best time to act.

Visit:

for comprehensive resources and guidance on navigating the business buying process. Equip yourself with the knowledge and support needed to make a successful acquisition and turn the current market upheaval into your advantage.


By following Parker’s seasoned advice and learning from real-life success stories, you can confidently navigate the business buying landscape and seize the opportunities that lie ahead.




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