BUSINESSMANAGEMENTREVIEW.COMJULY 20249Taxes, Depreciation and Amortization) or other similar metrics of profitability such as SDE, Net Income or Free Cash Flow. Low multiples have recently made these assets attractive to smaller private equity funds as well as young professionals, mostly Millennials with a sprinkle of Gen Z, who are seeking new and cheaper ways to create wealth. The combination of low multiples, potentially higher returns and lower capital needs has recently generated many success stories, creating a brand-new trend in the business world. Besides the reasons mentioned above, what does make these smaller organizations attractive? In most cases, it's the presence of multiple "low-hanging fruits" that, once addressed, can help a business boost its profitability, its ability to compete and A PERSONAL GUARANTEE REPRESENTS ANOTHER SIGNIFICANT BURDEN IN A BUSINESS OWNER'S MINDultimately, its scalability. Most times, these organizations have already been successful in presenting a solid track record of profitability; nevertheless, they come with many operational inefficiencies that may only require a quick fix or the adoption of more modern infrastructure and systems. Trust me, there's plenty out there. Generally, these inefficiencies are the result of a company's leader being heavily involved in the day-to-day operations, which prevents them from being in tune with more modern business practices, but also to look at their business from an external POV, which would enable them to implement the necessary tweaks. Furthermore, when a company is generating cash and positive income, the necessity to improve is much lower. Another aspect to consider with regard to this lack of urgency can also be linked to the modern concept of "work-life balance." Generally, when a business breaks through the $5M/$10M revenue ceiling, operators are able to combine success with a decent lifestyle. They can take home a substantial income while being able to spend time with their family and see their kids growing. Ultimately, a personal guarantee represents another significant burden in a business owner's mind. Growing a company to the next stage can mean higher personal liability, which can put a family's lifestyle and security in jeopardy. As we can see, the SMB World is very intricate and complex, with trends and dynamics that are more relatable to anthropology than finance. By 2030, all boomers will be at retirement age, which means that the market may be flooded with the last wave of opportunities. Will the Millennials and Gen Z be able and courageous enough to pick up the slack? Andrea Natarelli
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