Is 2022 The Best Year to Buy A Service Business In Recent History?

Jan 18, 2022

One of the factors that creates price inflation is when an excessive number of purchasers pursue the same items.   A second element is when there is a scarcity of products resulting in enhanced competition for the same products. A third component that has created our present inflationary period in the American economy, has been a general reallocation of the major components of the economy.  Historically, the allocation of discretionary dollars by an average consumer after paying basic expenses including occupancy, insurance, communications, utilities, and vehicle related items has been divided between goods (e.g., technology, clothing, books, etc.) and services (e.g., restaurants, entertainment, gym memberships, travel, etc.). This changed during the COVID-19 pandemic as public health precautions diminished the ability to spend money on experiences forcing a greater percentage of people’s dollars to chase available goods that could be enjoyed at home or with proper social distancing.   The end result has been one of the worst inflationary periods in recent United States economic history during the last year.

The good news is that the second and third inflationary pressures presently impacting the economy appear to be starting to diminish with people reengaging with the service sector as the Omnicron variant spike starts to recede as it has done in other areas of the world with some predictability and the supply chain appears to be catching up with consumer demand.  This reengagement with the service sector is anticipated to be accompanied by a strong appetite by the public to return to the lifestyles they enjoyed in 2019.    In the world of entrepreneurs, customer demand equals opportunity. Early arrivers at the party, traditionally experience the most significant benefits.  

The following are a few of the industries IBA has identified that are likely to see increased revenues & profits in 2022:

Bars & Music VenuesAs a music lover, I greatly missed the ability to experience live shows during much of 2021.  One of my favorite music venues in Seattle is Dmitriou’s Jazz Alley.  During the last couple of months, I have returned to the venue for dinner & shows to see Kandace Springs & Stanley Jordan.  It was wonderful to be back.  I readily admit I am risk acceptant and was in the first wave of people returning to hear live music.  It is anticipated that the return of people will follow a bell curve with the bulk of people returning as they hear about friends & family members doing it without adverse impact.

Sports Young to old find personal pleasure in physical fitness activities.  The activities can range from spinning & yoga classes to weightlifting to indoor soccer and bowling leagues.   Many of us have missed these life affirming, social engagements.  Increased vaccination and natural immunity should allow more of us to participate  in these activities in 2022 than in the prior two years.

Education A smart person never stops learning during their entire life.  Education starts with preschool, motor coordination, and art classes and evolves throughout our lives to incorporate activities like ballroom dancing, bridge, cooking, and ceramics.  It is anticipated that more people will participate in live education in 2022 than at anytime since before the start of the present decade.

Travel  It has been said that travel is the “spice” of life.  The travel industry has already started to see increased bookings and deposits.  It is anticipated that from children visiting Disneyland for the first time, in an American right of passage, to people returning to the wine regions of Walla Walla, Napa, France, and Italy that extensive travel will occur this year employing abnormally robust financial reserves due to inactivity for two years. This resurgence will be appreciated by entrepreneurs throughout the economy from limousine companies to tour operators to seminars providing education of exotic travel destinations.

IBA has long been regarded as a market leader in the Pacific Northwest in the facilitation of the sale of service sector companies.  It is anticipated that we will have a nice menu of historically, profitable, well established companies for buyers to evaluate in 2022 in a spectrum of service industries from Baby Boomer entrepreneurs who having successfully weathered the COVID-19 storm elect to punch out their time cards and officially retire.  IBA, with its franchise brokerage division, also has the ability to sell proven, franchised business model opportunities to entrepreneurs who wish to bring a service to their community or who have identified an underserved niche in the marketplace.  If you are interested in buying a service sector business in 2022, the members of our transaction team serving that component of the economy would welcome the opportunity to talk with you.

If you are a service industry business owner in the Pacific Northwest interested in selling, we would embrace the opportunity to provide you with an overview of our client services.  As always, all conversations with IBA are held in strict confidence and 100% of our fees are payable upon successful completion of a project.  

Unique business opportunities are anticipated to exist in 2022 in the service sector, the question is will you be a party who answers the knock on the door or who elects to “shelter in place” and let someone else venture out first into the dawning new spring day economically.  

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, and mergers & acquisitions community on subjects relevant to the purchase & sale of privately held companies and family owned businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.