From Government to Private Sector
Let me start by saying, this is NOT a political statement or article. Rather, it’s looking at our current environment to identify opportunities for my clients and our industry as a whole.
At last count, over 75,000 federal employees have been laid off or offered buyouts. Contrary to what many people assume, most federal employees are not based in Washington, DC. Many of them work remotely and live in communities all over the country. They choose government jobs for a variety of reasons: the chance to serve, the benefits, and until recently, the job security.
Now that their lives and livelihoods have changed overnight, they’ll be forced to evaluate options. With small businesses being the backbone of our economy, my educated guess says that many will consider starting or buying businesses with their severance pay, and why not have a property management business at the top of their list?
Of course, owning a property management company can be rewarding for people who are organized and have strong people and communication skills. It can offer flexible hours, independence, a low barrier to entry, and rewards hard work. It can be an entrée into real estate ownership, which is a time-proven way to build wealth, and property management companies often operate with healthy margins and endless opportunity.
People will always need places to live, and, therefore, landlords will always need managers. In most rental markets, property management can provide a relatively stable career (similar to what they may have experienced with their previous job), and people who have had success in large organizations and who have strong problem-solving skills can thrive. That experience will prepare them to take on their new adventure and even their own portfolio of rental properties.
Which brings us back to your property management business. If you’ve been thinking about selling your company or part of your portfolio, this is a good time. Don’t look at every significant event as a challenge… instead, see what opportunities it presents. Every large corporate or government Reduction in Force sends experienced and qualified people into either the job market or the market for buying well-run companies. They may have buyouts or retirement savings that allow them to invest in an industry that will pay them commensurate with their effort, something even the best government jobs don’t always offer.
It’s never too early to schedule a discovery to talk about your business’s health. We’ll explore the strengths, weaknesses, and opportunities of your portfolio and operations, and how those relate to the market’s perception of value.
We’ll also talk about your personal goals. Why are you thinking about selling? When do you believe you’ll be ready to exit the business? What do you need to fund your retirement or the next phase of your life? Would you be willing to stay in the business if you had a partner who could infuse cash and help the business get healthier or bigger?
Knowing what you want and need from a sale is step one. Step two is knowing where you stand right now. How close are you to that goal? A broker’s opinion of value is an informal valuation based on high level financial analysis, market conditions, and looking at comparable companies that have sold within the last year.
Knowing what you have, what you want, and what you need means that when an opportunity to sell, take on an investor or partner, or grow the business comes along, you’ll be ready.
To get a professional opinion of value, click here.