28 Jan 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 Drop 22% in 2020, Thriving Businesses Sell at Record Prices as COVID-19 Pandemic Reshapes Economy” reviews results from the BizBuySell Insight Report. The report looked at industry trends in 2020 and previews 2021.
Analysis based on 7,612 reported transactions and polling of 2,800 business owners, buyers and brokers revealed several key findings such as:
- The number of small businesses reported sold in 2020 dropped 22% compared to 2019
- The median sale price rose 12% to $279,950
- “Pandemic-resistant” businesses experienced significant revenue growth
- 21% of buyers identify as newly unemployed and 36% as unhappy with their job
- 18% of surveyed owners delayed selling their business due to the pandemic
- 87% of business brokers expect more owners to sell their business in 2021
A recent article from Entrepreneur entitled “10 Reasons Deals Collapse” discusses why the sale of small businesses often falls apart. Business owners want to see their creation continue to succeed, so it is important as a buyer to take steps to foster a successful sale.
Tips for buyers include:
- Figure out what the seller wants
- Get to know the seller
- Align buyer-seller incentives
- Set parameters for when lawyers will get involved with conversations
- Establish a consistent dialogue
- Due diligence is important because sometimes the owner doesn’t even know about something
- The internet can be a valuable tool for due diligence
- Know your best alternative to a negotiated agreement
- Don’t get ahead of yourself, it’s not final until the deal closes
- Utilize experienced transaction professionals
A recent article from Forbes entitled “Why Can’t I Sell My Small Business?” discusses why business owners sometimes have a difficult time selling their business and what their options are to resolve this challenge.
Businesses can be difficult to sell because:
- The business can’t operate without the owner
- The owner is the brand
- There are no employees who can fill the owner’s shoes
Owners who find themselves in this situation could:
- Sell to a competitor who values the customer base and has experience
- Train a successor
- Find groups buying businesses in their industry