Is 2019 the Year to Grow Your St Louis Business or to Sell
The economy in St. Louis seems to be growing and shrinking at the same time. In a complex picture like that, it can be hard to know whether you should invest in growing your business or start preparing it for sale. LINK's St. Louis team of business brokers have experience on the ground to help local business owners make a tough decision about buying or selling. St. Louis business owners who are thinking about selling need to know whether 2019 looks like a good year to grow or to move on.
The Gains of 2018
Economic growth in 2018 exceeded expectations in most industries. St. Louis, in particular, benefited from the surprisingly strong growth, relative to the national economy. Unemployment in the area fell to 2.9 percent by the end of November 2018, which was lower than the national rate of 3.5 percent. This signaled strong potential for growth in the coming year, but the signs were not all positive.
The gains of 2018 were offset by the effects of multiple overseas trade wars, as traditional import/export markets competed with the United States to raise tariffs and influence each others' markets. The United States has a well-insulated domestic economy, one that's not very vulnerable to a decline in trade, but the effects still reached St. Louis and resulted in somewhat slower growth in the last quarter of 2018. Perhaps worse, the Federal Reserve raised interest rates in 2018, making it more expensive to borrow and slowing growth further. Nationally, growth is expected to continue in 2019 but at a slower pace than in 2018.
The Road Ahead for St. Louis
The major industries in St. Louis are aviation, biotechnology, chemicals, electrical utilities, food and beverage manufacturing, refining, research, telecommunications and transportation. That's a really diverse list, and it's almost impossible for all of them to be growing or shrinking at the same time. This creates a confused picture for local business owners trying to suss out how the local business climate is doing. The picture can also easily be scrambled by the actions of a single large local player. Boeing, for example, manufactures its 777s in the St. Louis area. A single round of layoffs or mass hiring by this one company can shift local employment and investment numbers enough to make a general decline look like growth — or mask growth with the appearance of decline.
Small and medium businesses in St. Louis are still attractive to many buyers, whether the economy overall is growing or shrinking. The diversity of the St. Louis metro area's economy gives it some shock resistance to national and overseas upheavals, creating a kind of economic safe space for risk-averse buyers. If you own a company that does all or most of its business in this environment, you might have a property that investors from more volatile markets, such as New York, Europe or even China, will pay a premium to buy from you. The challenge for selling a business in St. Louis for the best price is, as always, finding the most interested buyers.
Selling a Business in St. Louis
If you've settled on selling your St. Louis-based business in 2019, you could have a lot of interest very quickly, but it may take time to find the right buyer for you. Offers have to be solicited, sorted through and evaluated for how serious the bidders are before you know what the market is offering you for your company. It helps to cast as wide a net as possible to get as many bidders as you can and filter out the less serious parties right away. Finally, negotiating a price and terms of the sale can be the difference between a satisfying deal and walking away feeling that you sold for less than you should have.
LINK St. Louis has helped countless local business owners buy and sell their companies over the years. We have a full team of experienced business brokers in our St. Louis office, one of many offices we have around the world. If you are thinking about selling a business in the St. Louis area in 2019, give our team a call at (314) 487-0005 today for a free consultation about your options.