It’s become increasingly difficult to make a successful deal in today’s increasingly competitive market. Nonetheless, there are those agile and adept enough to raise the stakes and come out on top. As the market continues to evolve, dealmakers are continuing to prove they are the ultimate wheeler-dealers, and dealmaking has been anything but slow.
1. Dealmaking Decline: The Exceptions
As economic conditions and regulations continue to shape the deal-making landscape, many sectors have experienced a decline in activity. However, there are encouraging signs of considerable growth in several industries.
Here are some of the exceptions, where M&A activity has been thriving:
- Technology: A persistent need for technological innovation has fuelled strong growth in tech sector start-ups. These start-ups need to establish themselves, grow, or be acquired by larger companies. This has resulted in a surge in M&A deals.
- Life Sciences: Mergers and acquisitions are also gathering steam in the life sciences industry, as companies attempt to harness new discoveries for their own development.
- Infrastructure: Global infrastructure projects continue to be driver of M&A activity, as governments and investors aim to expand and improve transportation, power, telecoms and water systems.
The industry-specific opportunities that these industries create have helped to ensure that deal-making activity has been resilient in these sectors, despite market volatility.
2. Navigating the Uncharted Waters of a Slowing Market
The unpredictable economic climate of today is daunting and navigating it can be difficult. With a broad sea of unknowns swirling about, it’s important to remain focused and steer our ship in the right direction. Here are some key insights to help guide the journey:
- Have a clear goal: It’s essential to chart a course with a specific, concrete destination. Caveat: Conditions in the market can change, so be prepared to adjust your course accordingly.
- Stay informed: Data and news are two of the best tools for charting a successful path. Keep your finger on the market’s pulse and be aware of any potential market changes.
- Flexibility is your friend: Have a plan, yes, but be prepared to deviate from it as needed. Don’t be afraid to reevaluate and revise goals that no longer align with the current market conditions.
With a keen eye and the right mindset, navigating a slowing market can be a relatively smooth experience. Learning to be comfortable with risk and uncertainty is the key. Having a basic understanding of market trends, as well as a solid grasp of personal goals and financial capacity, can go a long way towards charting a fruitful course – no matter what rocks come into view.
3. Dealmakers Adapting to an Ever-Changing Environment
The rapidly changing business landscape is both a challenge and an opportunity for dealmakers. On one hand, being agile and able to respond quickly to the newest trends and consumer demands is a necessary part of success. On the other hand, it can cause instability by making processes that were once reliable no longer as effective.
To stay ahead of the curve, dealmakers must become adaptive and innovate regularly. Here’s a few of the areas they should be focusing on:
- Understand the customer: By researching the customer’s needs and preferences, dealmakers can identify the right product or service to meet those wants.
- Develop new technologies: Experiencing success requires experimentation and embracing emerging technologies. By taking the risk of introducing innovative products or services, a dealmaker may be able to capture a larger market share.
- Adapt to short-term objectives: The dealmaker should focus on responding to the marketplace in the present rather than planning for the future. Short-term objectives should guide decisions and actions, to stay ahead of the competition.
4. Riding Out the Slump: Strategies for Successful Dealmaking
Steady as She Goes
As any successful entrepreneur will tell you, a downturn in the market requires a fresh approach. You must remain daring enough to do deals and bold enough to adjust your standards in order to remain competitive. Here are a few strategies to consider when dealmaking during an economic downturn:
- Be flexible. Don’t be afraid to consider various pricing models, alternative payment plans or other creative solutions that can help get the deal done.
- Assess risk. How much risk are you willing to take on in order to make the deal happen? How can you mitigate this risk?
- Evaluate value. It is imperative to get the full story and do your due diligence in order to properly assess the value of any transaction.
You must also be willing to adapt and refocus your approach to dealmaking. During a downturn, one may need to shift focus and think differently about conventional business deals. Don’t be afraid to scale down and focus on smaller deals with more manageable risks, or turn to new industries for opportunities. Keep an open mind and stay nimble for success.
Like the tortoise and hare, dealmakers have offered a steady, implacable approach to dealmaking during the current times of uncertainty. Despite slowed progress elsewhere, these dealmakers continue to press ahead in pursuit of their goals. Clearly, dealmaking is far from done!