01 Jul Around the Web: A Week in Summary
The following information has been sourced by Business Brokerage Press for the benefit of the business brokerage community. The views of these articles do not necessarily represent the views of Business Brokerage Press. We hope you find this information helpful.
A recent article from Small Business UK entitled “Are people buying or selling a business during COVID-19?” examines buyer interest in light of the COVID-19 pandemic as observed by BizBuySell.
When the shutdown hit, BizBuySell noticed that although searches for businesses for sale on their website dropped dramatically, there were still thousands and thousands of buyers looking for businesses for sale. Interests shifted to industries such as tech, e-commerce, convenience stores, pet stores and gas stations. It seemed buyers had cash and were looking to make a smart move.
BizBuySell decided to talk to buyers and get an idea of their situations and plans. Survey findings include:
- Over 54% had significant cash to use as a deposit
- 80% believed prices would come down
- 38% intended to finance the entire purchase with cash
A recent article from Forbes entitled “10 Ways To Safeguard Your Interests When Selling Your Business” offers strategies to help business owners protect their interests when selling their business.
These strategies include:
- Vet all parties involved
- Enlist the help of experts
- Only sell the buyer what they are actually looking for
- Get a valuation
- Understand the value of the business
- Make sure the buyer can pay you
- Limit indemnification claims
- Get an upfront payment
- Evaluate tax implications
- Register intellectual property and make specific arrangements for each item
A recent article from Divestopedia entitled “The Value of a Valuation” explores the importance of investing resources into a business valuation and understanding what factors impact the value of a business.
Factors that impact the value of a business include:
- Supply & Demand – High demand and low supply typically result in a higher sale price.
- Growth – High growth potential that is detailed and credible can lead to a higher sale price.
- Risk – If a buyer perceives a higher risk, they may be inclined to pay less for the business.
- Volatility – How vulnerable a business is to external factors can impact what a buyer is willing to pay for it.
- Synergies – If a buyer sees synergies between their business and the business for sale, or if they want to block someone else from buying the business and becoming a threat to their business, they may be apt to pay more.