18 Mar BizBuySell Quarterly Insight Report – Doug Whitmire and Adam Debussy Present Key Findings
In our previous article, we touched on some of the key findings of the latest BizBuySell Quarterly Insight Report with Doug Whitmire and Adam Debussy that were discussed during our recent BBP webinar. One of the findings of the report was that businessowners had indeed faced considerable obstacles stemming from the pandemic. Yet, on the other hand, transactions are looking like they will strengthen in 2022. Let’s dive deeper into the responses that BizBuySell received from businessowners and other respondents.
Trends Related to Burnout
Businessowners continue to face pandemic related challenges, although there is a light at the end of the tunnel. A staggering 64% of businessowners noted that they had experienced mass staff shortages as employees were out sick. Additionally, a remarkable 35% of businessowners had to temporarily close down their business, or more importantly, were considering closing.
As Whitmire observed pandemic fatigue has become “the new burnout.” Pre-pandemic burnout was a key reason why businessowners would opt to sell. But now, pandemic fatigue seems to be playing a similar and quite notable role. The end result is that 43% of owners are now considering selling, and pandemic fatigue is clearly playing a role.
A More Balanced Landscape
In the survey, brokers were asked if they believed that owners were more or less likely to sell their business in 2022 versus 2021. The general trend was towards brokers believing that there would be more businesses sold this year as compared to last year. Last year the view was that buyers had the edge over sellers. However, now it seems as though brokers feel that the landscape has shifted and become more balanced overall.
Many businessowners are still not ready to sell their business. As to whether or not businessowners would have three or more years of clean financial statements to support their asking price, the answer was surprising. 79% responded that they would indeed have 3 or more years of clean financial statements. Yet, 21% responded that they did not.
An Opportunity for Brokerage Professionals
In terms of whether or not owners knew the value of their business, only 55% stated “yes,” and 35% stated “no.” Only a mere 8% of respondents had a professional evaluation ready to go.
That 8% statistic should stand out to business brokers and M&A advisors. It shows that most businessowners are lacking a professional business evaluation. You can use this fact as a way to initiate conversation and interaction with owners. In short, the lack of professional evaluations on the part of most owners is a way for you to generate much more interest and greater numbers of leads.
Further, many projective buyers are waiting for baby boomers to retire. Brokers report that 23% of their inquiries come from newly unemployed individuals seeking to buy a business. Many of these individuals are from the “great resignation.” In fact, statistics show that a record 5 million entrepreneurs filed for business applications in 2021. The rate of individuals seeking to own a business is soaring.
