Taking Advantage of this Time

The initial focus on the pandemic and our health has been the number one priority for business owners and their staff. And rightfully so! What is going on in our economy now is not normal, and none of us are sure when it will return to normal. But we are certain that in order for any business owner to survive and thrive, they need to take this time to work on parts of their business that may be more strategic, or address areas where they want/need to improve. In short, it is time to get focused on making your business better, focusing on efficiency, better service, and products for your clients. Here are some questions you should be asking yourself as a business owner:

• How can I innovate during this time?
• What are my weaknesses, and what do I need to invest in to get better?
• How can I outperform the competition?
• How do I reduce my unnecessary costs to make cash last longer?
• What are my top priorities over the next 90-180 days?

At VR Business Brokers, we are practicing what we preach. During the last 90 days, we have invested in additional technology to better serve our clients, and we are working on additional ways to enhance our overall level of service while expanding our services. We have been taking additional courses and attending industry conferences to provide our clients with the most relevant information as we proceed forward. We are not sitting still, and we are working on a few other items that will be unveiled in the future. This pandemic will pass (hopefully soon!), and we intend to be stronger for our clients and partners. Want to talk about how you can work on your business right now? Feel free to contact us as we are ready to listen and help.

Should I Sell a Business Now?

We are getting asked this question a lot right now. The short answer is as follows: If you have a good cash flowing business that is in good shape, yes, it remains a good time to sell. It always is and there is always demand for good, strong cash-flowing businesses. For businesses that are strong, we do not anticipate much deterioration on prices or multiples. We have consulted with many valuation experts and banks on this topic from all over the country. Transactions and due diligence may take longer. We sold a nice business two weeks ago with an SBA loan, and we have others under contract. If you have been severely impacted by this pandemic, no, it is not a good time to sell as you will need to recover and show the business is viable to yourself and your team. And a buyer.

But remember, pandemic or not, business will go on. For every business owner, it is a personal decision when to sell a business, and clearly, the market has shifted, as well as the psychology. I certainly understand why a seller would want to wait for a little more certainty, and we are talking with a lot of sellers who want to understand their options.

Should I Buy a Business Now?

This one is a little more obvious to me. Yes, this is a great time to buy a business. If you have been looking for a while and are ready to make the jump, interest rates remain very low, capital is available, access to labor has improved, and landlords are more negotiable than 90 days ago. And there are plenty of good businesses out there (Hint: we have some!). Many of our sellers today started their business during or right after the big recession in 2008-2009 and thrived. Again, this is a personal decision that takes into account your risk tolerance and future of the economy and confidence in yourself going forward.We are getting asked this question a lot right now. The short answer is as follows: If you have a good cash flowing business that is in good shape, yes, it remains a good time to sell. It always is and there is always demand for good, strong cash-flowing businesses. For businesses that are strong, we do not anticipate much deterioration on prices or multiples. We have consulted with many valuation experts and banks on this topic from all over the country. Transactions and due diligence may take longer. We sold a nice business two weeks ago with an SBA loan, and we have others under contract. If you have been severely impacted by this pandemic, no, it is not a good time to sell as you will need to recover and show the business is viable to yourself and your team. And a buyer.

But remember, pandemic or not, business will go on. For every business owner, it is a personal decision when to sell a business, and clearly, the market has shifted, as well as the psychology. I certainly understand why a seller would want to wait for a little more certainty, and we are talking with a lot of sellers who want to understand their options.

Seller Education

Finally, I wanted to send you a link to our video on seller financing. In this current environment, we anticipate more deals having an element of seller financing to give the buyers additional comfort. Here is our video on this topic:

Be healthy and feel free to reach out to us if we can be of any assistance!

Adam

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ABOUT AUTHOR Adam Petricoff

Adam has over 25 years of sales, marketing and management experience working with a variety of different industries including textiles, hospitality, healthcare, distribution, and manufacturing. Adam is a native of Cincinnati, OH but is happy to call Charlotte his home after moving to Charlotte in 1998. He received his B.A. in Political Science from The American University in Washington, D.C. Adam loves to play tennis, volunteer at his house of worship and travel with his wife of 21 years and his two teenage children. When on the road they love to seek out local ice cream shops.

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