Even in the midst of this economic downturn due to the COVID-19 crisis, it is still possible to sell or acquire a business.
Connecting a willing seller with a willing buyer is what we do as Business Intermediaries (Business Brokers); however, the crisis has created a more challenging set of complications. Business valuations have been greatly impacted and will will need to be adjusted for many factors, including resources required to re-start "normal" operations, revenue and earnings projections, retaining/rehiring key employees, customers lost or clients negatively impacted, changes in buyer habits, change in government regulations and other unforeseen changes.
For some businesses this crisis has been much more detrimental to specific industries, think restaurants. Some businesses have continued to prosper with little, if any, negative impact.
Once a business assessment and valuation is completed, there could be creative ways to structure an offering and consummate a sale. For example, there may be an agreement for an "earn out" if revenues recover and reach a certain amount. The seller may offer attractive seller financing.
As a result of the massive lay-offs, there will be buyers looking to own and operate their own business versus looking to simply reenter the workforce. Savings could be put to work versus being depleted while looking for a new job.
An additional enticement to buy a business is the SBA's current Debt Relief program. The SBA will pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27, 2020. Review the SBA Debt Relief provisions.
The team at Edison Business Advisors is here to help. Please contact us for a no-obligation discussion.
Steve Niehaus, MBA, CBI
[email protected]
239.565.3171
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Fri, Apr 17, 2020Share Article
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Is Now the Time to Buy or Sell a Business?
