The Post-Labor Day Boom
Prepping for a summer slowdown
With Labor Day upon us, the business community is preparing for transition out of the summer slowdown. In both 2012 and 2013, the mergers and acquisition community saw a real Post-Labor Day Boom in deal activity. After summers filled with vacation, deal makers returned to have a productive and profitable fall deal season.
Activity picked up almost immediately after Labor Day, and the trend continued into the following months. Ultimately, we saw a 22% increase in deal flow from the combined first and second quarter totals to the combined third and fourth quarter totals.
The same trend appeared in 2012 thanks to the anticipated tax hikes set to occur at the end of the year, deal flow still trending upward after Labor Day. The first week of September was sluggish, but deal flow picked up in the following months. Activity continued to surge, with a particularly active month of November.
If the Post-Labor Day Boom from past years holds true in 2014, the business community should begin to see increased activity in the coming weeks. In 2012 and 2013, there was a marked difference between the pre-Labor Day low and October’s peak deal flow.
With Labor Day signaling the middle of the third quarter, it makes sense that more deals occur in anticipation of the fast-approaching year end. The distinct ebb and flow of ready Buyers and Sellers finally come together and businesses can be successfully transitioned. With that in mind, the Industry Experts of The Firm Business Brokerage predict that the end of the third and beginning of the fourth quarter in 2014 will see more deals closing in the Midwest market and more businesses operating under new ownership at year end. If you have been thinking about selling or buying a business, now is the time to act by initiating a confidential and complimentary business valuation with a member of our executive staff.