Marketplace Update

No One Could Predict a Pandemic!

Who could have known?

Over the years Bailey Routzong has advised our readers via updates on the business and operational risks that we believe school owners will be facing in the coming months as those factors arise in the marketplace. However, BR has to acknowledge that we never warned of a coming pandemic… that existential threat for which no one could have or did raise such warning! Such an ominous threat turned our business/financial world upside-down, and every business in every industry has had to face challenges that they had never dealt with before; and, those challenges continue now to create “uncertainty” for every owner in our industry as to what comes next from this pandemic… it obviously has a minimum of several months to go before we can have some level of predictability about what the final outcomes may be.

So Much Uncertainty

  • Will your school(s) be able to recover their pre-pandemic level of enrollment and revenue?

  • Will the local, state, or federal government continue to limit the scale of your business operation and thereby your ability to achieve earnings from your business?

  • Will the recessionary conditions in the country limit school operators’ ability to raise rates in the effort to offset increased costs of “health and sanitation measures”?

  • Will your area face a 2nd wave of the Covid-19 in the late fall and winter flu season and therefore potential shutdowns, again?

  • Will we have a readily available proven vaccine? By what date would it be available to all of the country’s population?

Well, all of the above represent obvious potentially harmful factors for your business and real estate value. However, anytime there is a major dislocation in the national economy, there are also created new fissures of opportunities in your marketplace, and that’s what we will focus on in our upcoming blog.

Your Second Chance…Erase the Uncertainty

As we almost always do we want to conclude on a positive note. Here’s some GOOD NEWS that few of our readers realize is happening, and you need to know this! In spite of no one early in 2020 seeing the pandemic and its monstrous damage coming, BR is delivering to its clients a second chance to protect their business asset values at prior levels. BR has created transaction structures that support an owner’s pre-pandemic values (yes, even before pre-pandemic enrollment and revenue is fully recovered!) and are yielding results equal to or very near those prior value levels. As this blog asks…are you going to wait on your decision and hope the above described coming risks all work out positively, or as many of our clients are now doing, will you act to capture the opportunity now available to take that hard-earned business value off the table and going forward protect it as your other investments?!

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