COVID-19 and Your Business

The entire world is facing an unprecedented situation with the COVID-19 outbreak and its effect on the world economy. If you are a small to medium sized business you are dealing with a lot of uncertainty, which may include:

1. If you are not considered an essential business, you may be experiencing mandatory closures due to the quarantine.
2. If you are a restaurant you are trying to find ways to keep employees on staff, increase pickup, delivery, and online sales.
3. You may be experiencing not only a decrease in revenue but a complete shutdown of all revenue.
4. You may be working with creditors to extend bills that may be due.
5. Last but certainly not least, you may be significantly stressed based on the uncertainty in the market.

Though things are chaotic it is still a good time to sell your business. There are a few assumptions you do not want to make because of the COVID-19 pandemic.

• Do not assume that because of the COVID-19 pandemic that your business is worth less.
• Do not assume there are no buyers in the market place due to the pandemic.

Adjusted Financials

If your business was successful prior to the outbreak, the COVID-19 is an anomaly that cannot, nor should not be taken into account when analyzing your business financials. A seasoned business broker can educate you on what the true value of your business is based on adjusted cash flow, sales, and EBITDA. The main consideration that will be taken into account are that your financials are adjusted. 

The entire economy has never been shut down due to a pandemic. Buyers and lenders will more than likely apply an adjusted analysis to financial results that have been impacted by COVID-19. By doing this it is basically saying that your business is worth the same as it was prior to the pandemic.

Essential Businesses and Their Worth

Are you an essential business that has had an uptick in revenue due to the pandemic? If so, there is a strong argument that your business is worth more now than prior to the pandemic. Being an essential business shows that your model can weather any future crisis, showing both stability and longevity regardless of what is affecting the economy.

Unfortunately, there will be casualties from this crisis. Not all businesses will survive, however there will always be investors looking for solid opportunities. With a decreased pool of businesses selling, this will cause an uptick in demand due to the limited opportunities available. 

Buyers are Incentivized to Purchase

The federal government has passed multiple stimulus packages to assist small and medium sized businesses weather the storm. The SBA Debt relief efforts are providing HUGE incentives for lenders and investors to continue lending and purchasing through this crisis. The incentives are as follows:

SBA will pay 6 months of principal, interest, and any associated fees that borrowers owe for all current 7(a), 504, and Microloans in regular servicing status as well as new 7(a), 504, and Microloans disbursed prior to September 27, 2020 (SBA Link)

Why is this a big deal? This is an enormous incentive for investors to purchase and defer payments on their investment.

Looking to Sell – Inquire Today

As a successful business owner, investor, and business broker I understand the challenges business owners face. In today’s unsettling times you need an experienced business broker that can look out for your best interests.

If you are thinking about selling your business, don’t’ wait! Let us do our due diligence in helping you make the most of the current market. There are plenty of buyers out there looking to invest in a solid business model. As the economy begins the loosen up the market will shift to more of a seller’s market.

Contact me today to receive your confidential consultation. We will discuss your goals, and how Transworld can help you achieve top dollar for your business. Call now to receive your free business consultation (904) 994-5235.