Advice for Buying a Restaurant and Selling a Restaurant

5 Reasons Why Restaurant Sales Will Explode in 2018

Posted by Robin Gagnon on Dec 21, 2017 5:03:05 PM

As restaurant brokers, we study all the economic indicators and talk to both restaurant buyers and sellers to gauge the future of the business. Since last January, we have been bullish on restaurant sales and those predictions have all come to fruition with BizBuySell reporting that this year is on track for the highest recorded number of business sales and our own results showing the same trend.

What’s our outlook for 2018? We predict restaurant sales will explode in the first quarter and continue at record breaking pace all year.  Why you ask? Here are five reasons we will see people buying and selling restaurants in numbers we haven’t seen in years. As one politician who famously coined this phrase says, “It’s the economy, stupid.”

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Reason 1

The Tax Bill which was approved by the House and Senate yesterday is already garnering massive support from the stock market and major businesses. This is the first major tax cut since President Reagan cut taxes in 1981 and 1984 

The first quarter of 2018 will be the first time Americans and corporations begin to see the real impact. We anticipate it will unleash pent up demand for those not in business, to get into business and establish a corporation with the 21 percent tax rate.

Reason 2

The Stock Market is booming with the current Dow Jones Industrial Average north of 24,000. There have been more than 50 daily records set in the past year and if yesterday’s results are any indication, the markets are very happy with the tax bill. With millions of working and middle-class Americans invested in the stock market through various retirement accounts, every announcement of a new record rings like a cash register in their hardworking ears. Some of those people are ready to buy businesses and will use their earnings to do so.

Reason 3

The Unemployment Rate in America today is just 4.1 percent, the lowest since 2000. Breaking this out by demographic, we’re seeing Latino Unemployment Hit Record Lows as well. The unemployment rate for Latinos is the lowest … ever … in the 45-year history of government tracking at 4.7 percent. At 7.3 percent, the black unemployment rate still needs to improve, but not since hitting 7 percent in 2000 have things looked this good, most especially after nearly two decades of double-digit unemployment.

Reason 4

Real Economic Growth is on the books. The third quarter of 2017 turned in an unexpectedly high growth rate of 3.3 percent despite two major hurricanes. Even though some are still saying it can’t be done, all indications (housing sales, retail sales) point to a fourth quarter edging toward the magic number of 4 percent. Put that in context with the historical performance. The United States went ten straight years without 3 percent growth in real Gross Domestic Product. These restaurant brokers are predicting that 4 percent is going to happen. There will be restaurant buyers who want to take the plunge while the economy is growing at this rate.

Reason 5

Soaring Economic Optimism no longer an ideal, it’s a reality based on the perception of today’s consumer. Don’t ask us. For the first time in more than a decade, a majority of Americans see our economy as “good or excellent.” A near record of 41 percent believe 2018 will see an even better economy and their home values rise; 42 percent believe their wages will increase. Perception is reality.

One article we read says, “Optimism in the American economy breeds investor confidence and consumer spending, which, in turn, drives all the creation and manufacturing and shipping of products needed to fill those needs, which, in turn, gives us Boom Times.

It’s absolutely true. “It’s the Economy, stupid.” That why these restaurant brokers are confident for these five reasons that restaurant sales will be unmatched in 2018.

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