Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

March 2, 2010

Small Businesses Slightly More Optimistic

By Joseph Eneldas

Placeholder

Small businesses grew slightly more optimistic last month, though they are still climbing out of a funk brought on by a credit crunch and a severe recession.

Index Inches Up

The Index of Small Business Optimism, released Tuesday by the National Federation of Independent Business, rose 1.3 points to 89.3 in January. It is up 8.3 points from March, the index’s low since the recession began and its second-lowest reading in history.

Separately, a new report showed businesses cut wholesale inventories in December.

Small Businesses Create Jobs Quickly…

Economists are keeping a close watch on the mood of small businesses, which typically create jobs rapidly during economic expansions.

“Despite the marginal increase in January, small businesses continue to lag the overall economic recovery,” RDQ Economics analysts wrote in a note to clients. “Historically, small businesses have created much of the hiring in an economic expansion and the weak state of small business confidence remains a roadblock to faster recovery.”

The report found small-business capital spending rose from the prior month but remained weak. Regular borrowers said credit was still difficult to access. The businesses surveyed said lackluster sales was their top problem and this meant they didn’t need to hire. Just 9% of owners added employees; 19% cut jobs.

But Few See Need to Hire

A larger employment survey confirmed that employers didn’t feel any urgency to add workers. The number of job openings in the U.S. rose 2.6 to a seasonally adjusted 2.5 million in December, the Labor Department’s Job Openings and Labor Turnover survey showed Tuesday. The number of hires fell 1.3% to 4.1 million, and layoffs and firings rose 3.4% to 2.1 million in December.

There were 6.1 job seekers per open job in December, down a bit from 6.3 job seekers chasing each job in November, the left-leaning Economic Policy Institute noted.

“To absorb the over 15 million officially unemployed workers in this country, plus the nearly 2.5 million ‘marginally attached’ workers…job openings and hiring must rebound dramatically,” said Lawrence Mishel, president of the institute. “This report offers no indication that that is happening.”

Meanwhile, wholesale inventories decreased 0.8% to $383.57 billion in December, compared to a 1.6% increase in November, the Commerce Department said Tuesday. Stockpiles for both durable goods, meant to last three years or more, and nondurables declined.

Companies slashed inventories deeply in the first nine months of 2009 to rid excess supply accumulated during the recession. The inventory drawdown forced businesses to increase production to replenish inventories and helped drive gross domestic product growth at a 5.7% annualized rate in the fourth quarter.

One bright spot

While inventories fell, wholesalers said their sales actually increased to $341.16 billion in December. That could indicate that inventories are nearing a low point and poised for a stronger bounce in the months ahead. Durable-goods sales rose, but nondurable-goods sales fell.

At the current sales pace, it would take 1.12 months for wholesalers to deplete the amount of goods on hand. The inventory-to-sales ratio was 1.14 in November 2009. Wholesalers make up about 30% of all business stockpiles.

Courtesy of Wall Street Journal, Jeff Bater

About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or info@neumannassociates.com

Leave a Reply

Your email address will not be published.

three + 7 =

Any questions? Please contact us at 732-872-6777
Call Now

Client Testimonials

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi

“Claus out of Florida helped us with the sale of our business. We had never done anything like this and him and his team walked us through the process from start to finish. We had some challenges through the process and Claus continued to show up even in the difficult conversations.”

Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs

“A Neumann & Associates is the only business broker I would use or consult with. They have assisted with 3 business sales over the past 15 years with me. They are honest and sincere and have always performed better than my expectations. They are the only one i would use for the sales of my businesses.”

James Belanger, Business Owner

“I wanted to take a second to commend the exemplary customer service from both you [Karin Neumann] and Mr. Valentino. It’s both a rarity in the industry, and very much appreciated.”

Andrew G., Investor

“We worked with Neumann & Associates to investigate the purchase of a research company in 2010 and found Achim to be capable, forthright and realistic. His depth of experience enabled us to fully understand our options, offering creative options that might enable the acquisition. While we didn’t acquire that particular company at that time, we know exactly who to call whenever we’re looking to buy or sell a business.”

Daniel Coates, Buyer

“Purchasing a business through this firm was a pleasure. Gary was very professional and transparent throughout the entire process. I look forward to working with A Neumann & Associates in the future.”

William Klemens, Buyer

“I utilized A. Neumann & Associates to assist in an M&A process. They are VERY thorough in using their time-tested process to calculate the value of investment opportunities, a process which provided a very detailed explanation for the value of the potential opportunity. Additionally, they also went above and beyond to extend other services including connecting with others who specialize in your industry and can assist with necessary steps including legal and accounting. Highly recommended!”

Edward Lane , Business Owner

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Achim, who explained the process in detail. He had his colleague Gary come to my office in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using when the time comes for me to sell my business for max value. They gave me great insight into the steps I need to take now to get the best deal in the future. I highly recommend this firm to anybody who wants to sell now or down the road. They not only know their stuff, their actually just real nice guys.”

Robert Kardane, Business Owner
view all testimonials

Contact A Neumann & Associates, LLC

If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

call us now
Contact Us for a Free, Confidential Consultation

Experienced M&A Advisors available

Full Name
Email Address
Phone Number
Message