Help Wanted – Pressure for Market Consolidation

I called a residential service company the other day for a bid.  The voice message basically said, “we aren’t taking appointments for 6 weeks. Job starts are 12 weeks out. Do not leave a message. Try back in July.” Wow!

And this company is not alone. If the labor market wasn’t bad enough before the pandemic, it is abysmal now.  We have consistently been hearing from our clients: “Nobody wants to work.” “Can’t compete with the free money.” “I would hire 5 people today if they were out there.” “We’re having our best year ever, and it could have been even greater.” And so on.

Let’s pause for just a moment to be grateful for this type of problem; some markets across the country are envious of what is happening in the Southeast.  Pensacola has recently been ranked in the Forbes Top 100 cities for cost of doing business, resulting in an influx of new businesses. Market demand (housing, services, retail and even hospitality in recent months) in the Florida Panhandle is high, yet workforce shortages and inflation are stunting growth.

Combine that with the population growth trends in the Panhandle, and outside capital looking for new frontiers, I am of the opinion that we will see some strong pressure towards market consolidation. In the Southeast, business sectors are still very fragmented, growth is high, and demand is increasing. On top of that, labor is constrained and inflation is, well, inflating.

Scaling buying power, shared resources, labor, and equipment may be one solution.  In other words, to capture the growth opportunities, this may be the time to merge with or acquire a business with immediately deployable employees, equipment and resources. GAI has many businesses listed for sale that possess a mature, well-established workforce that could be leveraged to address demand of an acquiring company. Also, if you have been on the fence about exiting your own business, this may be the perfect time to come to market.

At GAI, we not only have a reputation for helping business owners exit, we also help build companies and help business leaders increase value, develop and grow. To discuss this topic or business transaction opportunities, please call us for a free consultation.