The coronavirus pandemic has raised many different questions in the business world, such as whether or not it’s even possible or recommended to sell a company right now. However, depending on the specifics of your business, it might be the perfect time to list your company for sale and look ahead to retirement. According to Barlow Research Associates, the average small business owner in the United States is 60 years old and 40% of owners of small businesses today are aged 65 and above. Many of them are looking at this coronavirus pandemic from the perspective of the bigger picture of determining their next steps and their goals.
Many of them don’t want to continue to put their energy, resources or time into rebuilding because of a coronavirus related recession. Emergent research recently shared a study showing that many of them are making these decisions primarily based on their age. The current businesses that are doing well in the sales market are e-commerce, delivery and online education.
Many business owners who are ready to cash out and retire are worried that maybe the coronavirus pandemic will set them back. However, investors with capital are always looking for the right opportunity regardless of what is currently happening in the market. The vast majority of advisors anticipate that valuations will decline in the coming years. However, some essential businesses have actually seen their valuations improving in today’s environment.
A total of 11% of businesses in the market today say they have not had any impact from COVID-19, whereas a further 11% have actually seen increases in sales because they work in industries that remain very prominent, such as online education, delivery, e-commerce and others. It could be very challenging to sell businesses that have been shuttered because of the pandemic since valuations are based on historical financial data. Many business sales transactions have been delayed during the coronavirus pandemic, but business owners are stepping back and deciding on whether or not now is the right time to sell.
The primary reasons for selling your company include burn out, health challenges, and retirement. If you don’t have a strong desire to continue running your business or it has been too difficult to pivot into a remote first workforce, now is a good time to think about the bigger picture and decide whether or not is the right time to sell.
Cleaning up your financial practices can set you up to sell your business from now. If you have been running some of your expenses through your personal business, now is the time to stop paying for these expenses so that you can get a better perception of your business valuation. Scheduling a consultation with our business brokers can also help you get a better perspective on what you should know about selling your business. Our business brokers continue to work with our clients today and help advise them about whether or not now is the right time to put your business up for sale.