Maine Business owners are coming out of the COVID pandemic like Maine Black Bears emerging from hibernation happily discovering that every single bush in the field is loaded with ripe berries. The arrival of an unprecedented influx of economic energy to Maine is as stunning as it is exhilarating.
The impact on Maine businesses that the COVID accelerated techno-cultural revolution has deposited on our doorstep represents a huge opportunity for business owners across the spectrum from franchisees to retail shop owners to technology companies. You may have noticed a spike in Maine real estate values. There are precious few homes to buy or rent in Maine. Thousands of people have finally discovered what Mainers have known for years, Maine really is the way life should be. At least for people who think they can telecommute. And telecommute they can as COVID has radically reshaped the American workscape.
The American workscape had been well on its way to the incorporation of the ‘virtual teams’ model many employers embraced pre COVD. Numerous academic studies have confirmed this. Remote working, the adoption of Zoom as mission critical work tech and the productivity increases yielded by other resulting efficiencies have augmented another surprising benefit to employers. Reduction in overhead and associated costs as well as risk reduction have made virtual teams and working from home a symbiotic endeavor. The cost savings that companies enjoy as a result of replacing full time employees with remotely located contractors is yet another inducement for employers to embrace this emerging workscape. Remote work is here to stay. As a matter of fact, it may become the norm sooner rather than later. We’re already seeing widespread reports of workers grumbling at the prospect of returning to offices such as occurred this week when the Mayor of New York City, Bill DeBlasio, demanded that City employees return to their offices.
Clearly, employees who are remotely located contractors are discovering Maine in droves. The chaos of COVID has turbocharged the uptake of remote working benefits for workers and businesses and the resulting economic energy and movement is a windfall for Maine business owners.
But what to do? From our perspective, the phone has been ringing off the hook with business owners interested in one of two things.
The first is selling into strength. Many Maine business owners see this influx of economic energy as an opportunity to cash in on a red hot business sales market. This is true across the spectrum, not just for people approaching retirement. This week I’ve taken calls from a long established IoT technology company, a cannabis grow/sales company and a dog grooming/kennel operation. Unseen by Main Street is the onslaught of businesses listing themselves for sale at seemingly the same rate as homeowners listing their houses for sale. The flow of economic energy to Maine is most certainly not unidimensional. It is a multifaceted event that will change the state for decades to come and is unique in Maine’s history. This change has the potential to surpass the logging and shipbuilding booms of centuries past in the transformation of our state. And all of this driven not by Maine’s resource richness, but simply because, if given a choice, workers will choose Maine’s QoL, all things being equal.
As such, Maine business owners are discovering that it’s a great time to figure out what their companies are worth. We’ve seen a tremendous uptick in Maine business owners wanting to do a business valuation, or ‘Broker’s Opinion of Value (BoV). It’s one of the smartest business decisions a small business owner can make and the benefits of a solid valuation are myriad, especially in a hot market. ‘You can’t get where you’re going if you don’t know where you are’ or an iteration thereof, seems to be the most common answer given when clients are asked why they are getting a BoV performed. Business owners who know their own numbers want to know about how they stack up and what reasonable comps are. A BoV is the logical place to start. A BoV is also very popular when business owners engage in a private sale. It’s a way to establish a value backed by rock solid data rather than conjecture between parties negotiating in the blind. And finally, a BoV provides value where value may have been left on the vine to die. Many insurance books of business, for example, are left to evaporate into the ether when agents and brokers reach retirement age. Those businesses have a value that can be liquidated for retirement funds rather than left to the market to absorb.
Somewhere in Augusta there is a Maine state employee who is trying to figure out how to replace ‘Vacationland’ with a license plate motto that speaks to a state reshaping itself as a destination for high wage earners who realize that they no longer have to quit their high paying job to move to Maine. Maine is now, finally and gratefully, ‘open for business.’
Hi, we’re Maine Business Advisors and we focus on assisting business owners in the buying, building and selling of businesses. Whether you are looking to retire or just getting started, we can help.