If you are planning on selling your business in the next five years then do it now because every day America gets one step closer to the next recession, said James Cassel, founding partner at Cassel Salpeter, an investment banking firm.
Cassel said rising interest rates will increase the cost of borrowing and that will lower the price that purchasers are willing to pay for a business.
When it comes to valuations, Cassel said today's values are relatively high and may not last. Furthermore, he said private equity firms are flush with money right now and they need to put that cash to work.
According to Cassel, the first Federal Reserve rate increase, which is expected to come next month, won't be material, but it will set a tone. As further hikes take place, they will increase the cost of doing business and that will hurt margins. Cassel said this will have a negative impact on borrowing.
"I think you will see the amount of deals start to go down and as a result of that, people may miss an opportunity that's available today," said Cassel.
As for the most "frothy" sectors in the market, Cassel said health care and technology lead the pack. He added that the southern Florida real estate market is currently strong, even rivaling the period before the 2008 downturn. But it could turn quickly.
"I can guarantee you that we will have another problem and there will be another bubble," said Cassel. "What I can't tell you is the timing on that."
Cassel added that the real estate buyers in Miami are generally from outside the country and not even a strong dollar is keeping them from snapping up coastal properties.
"It's somewhat of a problem, but if you are in Europe or in South America, you really need a place to park your money," said Cassel.
Finally, Cassel said investment bankers and brokers will still do well in 2016 as more businesses change hands. He does not expect these businesses to turn down for another two or three years, when at that time, the distressed players will take over.