How the Great Resignation is Creating New Opportunities for Buy and Sell Side M&A

Acquisition Entrepreneurship in a Post Pandemic World –

It seems the phrase is everywhere: the Great Resignation. It’s also been called the Great Reshuffling. The Great Retirement. Pundits everywhere have been struggling to explain and rationalize the mass exodus from the workforce that began in earnest during the early days of the pandemic and continues today. According to Bureau of Labor Statistics , through November 2021, an average of more than 3.9 million workers quit their jobs each month, meaning 2021 will hold the highest average on record, topping the 2019 average of 3.5 million. Job openings have been hovering around 11 million.

Early speculation was that much of the exodus was younger Millennial employees, but more recent data has shown that the largest portion of those leaving the workforce are Baby Boomers, many of whom are choosing to retire earlier than planned. The meteoric gains of the stock market in recent years, coupled with the risks of COVID exposure and the “Zoom fatigue” of remote work, have spurred what some have called the “silver tsunami.” The Baby Boomers, long the largest slice of the demographic pie, have opted out in record numbers.

Right now, we’re seeing a “perfect storm” of opportunity for both buyers and sellers of businesses. As experienced business brokers, we at Exit Equity believe we are seeing the beginning of a golden age of Acquisition Entrepreneurship.

Reasons Why Business Ownership Transitions are Skyrocketing

While many industries reckon with the fallout of this retirement and resignation spike, the implications for business owners – for both buyers and sellers of businesses – cannot be overstated. Exit Equity has been seeing unprecedented interest in business ownership transition due to multiple factors. We’re going to address just a few:

Strategic Sales

  • Companies who want to grow but are stymied by the war for talent in a tough job market seek to grow by acquiring other businesses and their talent. On the flip side, some owners are not interested in fighting in the war for talent and see this new challenge as an extra incentive to exit.
  • 2021 supply chain challenges have rolled into 2022, likely to persist through the end of the year, and companies are looking to buy up and down their supply chain suppliers to better control their products
  • Legacy (older) companies, and those with a local or regional focus, are ripe for digital transformation. It is a great opportunity for potential owners to invest their knowledge and resources in a successful business, and also a great reason for current owners to exit before making a substantial investment in transforming their existing business.
  • After two years of work remote ,and a return to office is imminent, the hassles of commuting and rigid time frame of the work day are causing employees to look closer at entrepreneurship.

High Net Worth Individual Buyers

  • Individuals who have been working for big corporations (notably, tech companies in our local area) for a while are looking for a move. Many have acquired large equity packages as part of their compensation and are now thinking that they want to own their own business. Entrepreneurship through acquisition is a great fit for them. This is particularly true for employees who are being asked to return to the office after working from home.
  • The stock market has delivered unusually high returns for the last few years. For potential buyers, it meant access to greater capital and the possibility of purchasing a business.

​Financial Driven Sales

  • Interest rates have been at historic lows, and while the Federal Reserve chairman has indicated a future tightening of the money supply, bank loans and rates are still on the low end for potential buyers to utilize.
  • Private equity funds who had paused investments while waiting to see how the pandemic would play out are ready to jump back in. They have capital and are eager to scale businesses with strong cash flow .

One factor that is harder to quantify but we believe has also driven a surge in interest in business ownership: a change in mindset brought on by the COVID pandemic. Many people are simply more ready to make a life change. The pandemic gave many people time to reflect on their work/life balance, values and goals and many found that corporate employment is less appealing.

We’re committed to helping buyers and sellers through this process – it is the core mission of Exit Equity. Buying or selling a business is one of the most important financial decisions many will make in their lifetime. We think the first step in making a transition is education about the rapidly changing landscape for business transitions – that is why we’re sharing what we know and what we’re seeing in the business marketplace.

In the coming weeks, we’ll explore more on how the Great Resignation is transforming acquisition entrepreneurship and why there has never been a better time to make a change. We know the Great Resignation is driving unprecedented interest in buying and selling a business. The most important advice we have for those thinking about this: don’t embark on the journey without a trusted expert who can guide you through the process.

This is the first in a series on business ownership transitions from Exit Equity. Follow us on LinkedIn and other social channels to get the latest installments and to get all of our updates.

About Exit Equity

Since 2005, we’ve helped hundreds of business owners make the biggest change in their career—shifting from owning a successful, privately-held business into a relaxing, passion-driven retirement. Meet the experienced team behind the work.

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