During the recession you need the safety net of cash reserves in your business.
The businesses which benefit most from economic recovery are those that choose the right time to put their funds to work. Cash deposits are currently generating very little income but if your business is doing well, now could be the time to invest for the future.
Should you expand?
Even in a tough market many business opportunities exist for those with the experience and ability to act quickly and safely. As the economy comes out of recession many business sectors are seeing consolidation as strong businesses absorb weaker ones. This is because asset values remains low and forced sales can push down prices even further.
Buying competitors is a quick way of increasing market share and defending your market position. Combining businesses can help to reduce risk by spreading income streams and reducing customer dependence.
Experienced teams and assets previously not on the market are now readily available.
Opportunities are more abundant at this time because there are a number of potential vendors who want to exit so a sensible offer might be welcomed. There will be others that recognise the need to consolidate and may welcome an approach to explain what options are available.
Assessing the timing of a deal requires a considered evaluation of your business and the drivers in the market. As part of this process you should be flexible in considering your options – a merger or partial exit might be a more attractive solution.