The main reason: Some entrepreneurs, hit by losses in the stock market, start looking seriously at buying a business that could give them the double-digit returns they used to get from Wall Street.
"The stock market returns on investments have fallen dramatically this past year from the euphoric highs over the previous several years," Read says. "So buying a business with a normal 20% return on investment is a more desirable option than previously."
Another factor is employment. "A downturn in the economy results in layoffs of both white-collar and blue-collar workers," Read says. "Many of these laid-off workers take this opportunity to purchase a business as a form of buying a job."
On the opposite side, business owners see a slowing economy as a good time to sell. "After 10 years or so of constant growth, many sellers recognize that the economy has slowed and their profits are likely to decrease in the future," Read says. "They realize that there is no better time than now to sell while their historic financial numbers still look attractive."
Read is so confident his company will do well in an economic slowdown he is projecting sales of $40 million this year, up from his firm's record $28.9 million in 2000, the highest in its 15-year existence. The Florida Business Brokers Association ranks Corporate Investment International No. 1 in the industry based on last year's sales.
Just as insulated from a recession as Read's firm is Barbara Vance's Vance Realty Group. She is banking on Florida's continued population growth to keep her small Orlando-based brokerage thriving. The firm did $35 million in sales volume in 2000.
"There has been a lot of talk and speculation, but no one has convinced me that there is going to be a recession," Vance tells GlobeSt.com. "Personally, I don't believe there will be, and that's not wishful thinking."
The broker says, "There's a big difference between events now and those in the late '80s that led to our last recession," she says. "I equate it somewhat to the Industrial Revolution of the 19th century, which opened new markets and business opportunity and changed the way people did business."
Vance calls the current economic slowdown "a market attitude adjustment to correct an over-zealous and enthusiastic marketplace." She asks, then answers: "Will this slow the economy? Probably. Will businesses suffer? Of course. But others will prevail and prosper, taking advantage of the opportunity."
Vance adds, "As long as people keep moving to Florida, the real estate industry (here) will remain healthy and strong."
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