Yes, now is an excellent time to sell your business.
Over the past 6 months of the pandemic, the question I have been asked the most is “is it really a good time to sell my business
Over the past 6 months of the pandemic, the question I have been asked the most is “is it really a good time to sell my business?”
Certainly, during March, April and May when many businesses were required to shut down, schools were closed early. and a stay-at-home order was in effect, we saw little economic activity. Subsequently, businesses re-examined their business models, adjusted as needed, cut costs and many applied for government funds. While we are not done with COVID-19, many businesses and industries have come out from Q2 healthy, leaner and relatively unaffected by the pandemic.
If your business was relatively unscathed from the last half of the year, then your business is just as salable as before COVID. The reality is that it is still a seller’s market. Not only is it still a seller’s market, we are seeing even more buyers looking for business opportunities. These buyers could be synergistic acquirers looking to diversify, corporate management looking to work for themselves or middle-class employees who want to move to an ownership role. These buyer pressures are maintaining fair valuations in the marketplace, despite other negative macro-economic trends.
Other conditions are also supporting business sales. The government and Federal Reserve programs are supporting lending and liquidity; banks are lending through SBA programs and interest rates remain at historic lows. Current tax treatment of pass-through entities allows for a 20% reduction in taxable income; this is motivating investors and operators to move back to active investment opportunities.
Yes, we could experience a protracted pandemic, or suffer through a secondary wave the causes further shutdowns in parts of the country. We could see a recession or suffer a localized disaster. But now we data to better gauge these risks to a specific business, industry or sector. If your business is still performing or you have made adjustments for the future, yes, your business is very salable.
