23 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 BizBuySell entitled “Small Business Acquisitions Dive in April Before Rebounding to Close the Second Quarter” reveals the results of BizBuySell’s 2020 2nd Quarter Insight Report. The report aggregates statistics from business-for-sale transactions from business brokers across the U.S. The 2nd quarter experienced serious shifts due to the COVID-19 shutdown.
Key findings from the report include:
- Small business transactions dropped 39% in Q2, with the biggest drop in April and some rebounding at the end of the quarter
- During May and June, the number of buyers searching and inquiring about businesses on BizBuySell eclipsed pre-pandemic levels
- 66% of buyers are seeking a profitable, pandemic resilient businesses
- The median sale price of businesses sold in Q2 rose 6.1% compared to 2019
- 68% of owners experiencing a decline expect it to rebound within the next year
- 16% of business owners plan to exit their business earlier as a result of the pandemic, 20% plan to exit later, 61% are not changing their timeline
A recent blog post from Transworld Business Advisors entitled “How to Prepare Your Business for a Post-COVID-19 Sale” discusses important things to keep in mind in light of COVID-19 if you plan to sell your business during the second half of 2020.
Consider the following:
- Do what you can to keep revenue coming in such as selling online or offering delivery
- Keep detailed financials on a month-to-month or week-to-week basis
- Write down what you learned, what you changed, and how the business has survived
- Evaluate how your industry has changed so you can offer insights to buyers
- Improvements made to help your business survive will also likely help it sell
A recent article from BizBuySell entitled “Study: The Impact of the COVID-19 Pandemic on Small Businesses” discusses BizBuySell’s recent survey of over 3,000 small business owners and buyers regarding the impact of COVID-19. The 41 question survey covered topics such as government mandated shutdowns, rehiring challenges related to unemployment benefits, exit strategies, expansion plans and acquisition goals.
Key findings from the survey include:
- 51% of businesses have had to close or suspend some operations
- 52% of businesses who are starting to rehire furloughed or laid off workers have experienced challenges due to the $600 federal unemployment benefit
- 16% of business owners plan to exit earlier than planned and 20% plan to exit later
- 80% of business owners would consider buying a business that has remained open but has been negatively impacted by the pandemic
- Buyers are looking to utilize the CARES Act benefit of 6 months free principal and interest on new SBA loans closed by September 27th