22 Jul Business Brokers and the Pandemic: Reasons for Optimism
During our recent roundtable event, Bob House discussed how the pandemic is impacting both sellers and buyers. House is Director of Product Management, General Manager and President with BizBuySell.com and BizQuest.com, which is the internet’s largest and most heavily trafficked business-for-sale marketplaces. In this article, we’ll review where we currently stand in terms of buyer and seller activity and what we can expect moving ahead.
Coming into March 2020, Bob House pointed out that he was seeing all-time highs with traffic and leads. However, this all changed quite quickly due to the pandemic. Stock market problems and shelter in place orders combined to create a decidedly chaotic and uncertain environment. House commented that by the end of April leads and traffic had basically recovered. Right now demand is quite strong on both the supply and demand sides. It is his view that the pipeline looks strong.
House believes that the current trends are very optimistic, despite the hurdles presented by COVID-19. If the current trends continue, then business brokers can expect to see rising demand listings as well as more deals being completed. However, House also points to the fact that this trend does have exceptions. In particular, business brokers should be aware that not every business sector will rebound quickly. For example, it will likely come as little surprise that location and business type can play a role in a buyer’s interest.
When it comes to locations that are currently being hard hit by COVID-19, the situation remains very fluid as of July 2020. This represents a far tougher challenge than areas where pandemic is more under control. Likewise, certain sectors, such as hospitality, will face a tougher road moving forward. As House wisely points out, lenders are needing to more cautious. So, business brokers should expect more scrutiny when putting deals together.
In short, business brokers should remember that the pandemic is creating an uncertain and dynamic situation that can change daily. Of course, this makes planning for the future more difficult than under normal circumstances. While there are obvious and persistent hurdles associated with the pandemic, it should be remembered that the situation is improving, and it is ripe with an array of diverse opportunities.