By Patrick Archer, MBA, CBI, CM&AP | Florida M&A Advisor | Calder Associates of Florida | 305.763.4112 (Mobile) 407.499.2855 (Mobile)
New Year…New York Exodus
With 2022 in its infancy, the time for keeping New Year’s resolutions has arrived once again.
And while “Exercise More,” “Lose Weight,” and “Save More Money” typically top the annual resolution ranking for Americans charting a path for self-improvement, a growing number appear to be a plotting a professional path to the Sunshine State. “Move to Florida and Buy a Small Business” is emerging as a plan for personal sanity, family unity, and financial stability.
“Move to Florida and buy a small business is emerging as a plan for personal sanity, family unity and financial stability.“
-Patrick Archer, MBA, CBI | Florida Business Broker
Lockdown fatigue, the never-ending variants and vaccine mandate flight are all factors cited in Zachary Kussin’s article, “New Yorkers are Fleeing to Texas and Florida in Droves.” In his NYPost piece, Kussin interviews several former New York business owners who have discovered a new life and new opportunities in two of the states with the most favorable climates for small business owners.
Livio Rosado, a former salon owner from Long Island, describes the boredom and frustration he felt when the first wave of lockdowns began impacting his business in 2020. The 38-year-old relocated with his family to Boca Raton and purchased an established Boca salon originally as an investment.
Fast forward two years, and the business is thriving and providing employment for 14 stylists including several that followed him down from New York. High touch businesses in the Sunshine State like salons and fitness centers were initially impacted by the new rules of the SPACED economy, but those that survived 2020 are rebounding nicely with the constant influx of new residents to Florida.
Florida Tops Net Domestic Migration Ranking
The most recent data from the U.S. Census Bureau suggests that states like Florida are on the receiving end of the most new residents, disposable incomes, and able-bodied workers. For the 12-month period from July 2020 (the nadir of the first wave of lockdowns) to July 2021, Florida reported net domestic migration of 220,890 people.
“An upwardly-mobile, free-spirited Sea of Humanity the size of Rochester relocated to Florida in a 12-month period.”
-Patrick Archer, MBA, CBI | Florida Business Broker
In other words, an upwardly-mobile, free-spirited sea of humanity comparable to the entire population of Rochester moved to the Sunshine State in a twelve-month period from 2020 to 2021. In second and third place were Texas and Arizona which reported net positive migration roughly on par with the entire populations of Syracuse (170,307) and Albany (93,096), respectively.
Not surprisingly, many of these new residents came from the three states that topped the list for most departing residents during the same twelve-month period: California (-367,299), New York (-352,185), and Illinois (-122-460).
According to the website How Money Walks, a state like Illinois lost more residents and wealth to Florida and Texas than to any other state. The fact that neither Florida nor Texas levies a state income tax is added fuel for out-migration-minded families and small business owners.
“The fact that neither Florida nor Texas levies a state income tax is added fuel for the out-migration-minded.”
-Patrick Archer, MBA | Florida Business Broker
“Out for Good”….Tales from the Front Lines
As Florida business brokers, we have the unique opportunity to put real names, faces and personalities on these one-dimensional statistics. These are Florida small business buyers and front line workers of those same businesses who left someplace they once considered “Home” in search of a better life for themselves and their families. Just this week I’m reminded of three such conversations with recent New York area arrivals.
First, a former New York glass and mirror installer who told me today how great it was to find a Florida glass and mirror shop owner that valued his skills and gave him time off for two recent family emergencies. It’s a sharp contrast to the chaos he fled repairing shattered storefronts in Manhattan. “Michael Kors, Louis Vuitton, Prada, all of them…we were constantly replacing the glass. When I finally left the city, I remember driving through Midtown and everything was just boarded up.”
Next was the local Florida business owner who told me how his 18-year-old new hire from New Jersey has turned out to be one of his best workers. “When Chris first got here during Covid, he would come in everyday and just thank me for giving him a job. He was so bored up there, and said there was nothing to do. Now he’s thriving, he’s one of my best installers, and I’m paying for him to get advanced training, because I don’t want to lose him.”
And the final interaction was with my next door neighbor who serves as in-house counsel for a hedge fund. When I told him I was surprised to see him around so much this year, he explained that the firm had decided to invest more time and resources in Florida. Apparently having a $55,000 a month lease in a Manhattan high-rise you’ve been unable to access for over two years has been liberating for him as well. As for the lease, “Six more months and we’re out for good.”
The most popular Florida small business sectors in 2021
If “Out for Good” describes your current state of mind and you have weighed the advantages of buying a business in Florida, it helps to know which sectors saw the most interest from actual buyers in 2021. According to the BBF database, there were thousands of deals this year where licensed BBF broker/members served as intermediaries in successful transactions.
Looking at the data, it is clear that the sectors and themes that pulled us out of the 2020 abyss continued to attract the attention of Florida small business buyers in 2021: Anything home services related including HVAC, impact glass windows and doors, plumbing, home remodeling, custom cabinets and stone, lawn care and tree services, pool care and property management companies were among the home-centric standouts.
“The sectors that pulled us out of the 2020 abyss continue to attract the attention of business buyers in the Sunshine State.”
-Patrick Archer, MBA | Florida Business Broker
Florida distribution and manufacturing businesses were equally sought after given the continued emphasis on home delivery and the continued post-pandemic surge in Florida’s manufacturing sectors.
2021 also saw strong demand for Florida medical-related businesses ranging from ALFs to home health care agencies to medical staffing businesses serving the state’s rapidly expanding over-65 population. The Sunshine State now has the highest percentage of senior citizens of any state, 20.1%, followed closely by Maine (20%) and West Virginia (19.4%).
Established Florida insurance agencies were another hot commodity in very short supply, while Florida auto repair shops benefited from the chip shortages and port logjams that crushed new car inventory levels.
Given the quality and quantity of inquiries we are receiving from out-of-state entrepreneurs, industry buyers, and private equity groups in the final quarter of 2021, there’s every reason to believe these Florida business sectors will remain in high demand in 2022.
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Timing Advantages for Florida Business Owners in 2022
The confluence of demand-side factors discussed above coupled with an improved outlook regarding capital gains taxes, low interest rates, and the limited supply of great (i.e., established, profitable, clean books, SBA eligible) Florida businesses for sale should create an ideal backdrop for Florida business owners contemplating an exit in 2022.
At Calder Associates of Florida, our team is dedicated to helping Florida business owners who are ready to confidentially exit and enjoy the next chapter of their lives whether that means pursuing a new business venture or enjoying a long-awaited retirement.
If you are a Florida business owner ready to cash out for top dollar, I welcome the opportunity to speak with you and prepare a free, no obligation valuation of your business.
Please contact me today at (305) 763-4112, text me via WhatsApp, or use the button below to schedule an initial consultation for Florida business owners.
Patrick Archer is a Business Broker with Calder Associates of Florida , a Certified Business Intermediary (CBI), a Certified Mergers & Acquisitions Professional (CM&AP), and a licensed Florida real estate broker. Patrick has thirty years of public and private sector experience in commercial banking, construction, e-commerce, government relations, marketing, and real estate development. His broad industry exposure and communication skills are assets when working with Florida business owners and qualified buyers, both domestic and international. Patrick is a trusted advisor who understands the importance of buyer transparency, seller confidentiality and client communication having served as Speechwriter for the Governor of Florida, the Chairman of the Florida Council of 100, and the US Ambassador to the Republic of Portugal. (LinkedIn)