What you need to know about Selling your business during the Pandemic
Selling your business can be a stressful and emotional journey at the best of times, let alone in the midst of a global pandemic! Absolute Business Brokers is an Australian owned, family-based small business and we can, therefore, relate to each and every one of our clients.
The impact of COVID on the market is not like anything ever experienced before in the modern world. Market trends literally change overnight based on the daily cases announced and restrictions imposed.Whilst it is a sensitive market, our agents are licensed professionals who have had years of experience in the industry to best navigate your campaign and sale.
Our team is dedicated to ensuring our clients get the best possible result in every market.
In order for our team of agents to get the most effective results for you, we rely on your co-operation and support.
We are committed to your sale and need your help to ensure we can get through this together.
To help alleviate any stress or concern around the sale and COVID, we’ve compiled a list of Myth Busters below that we’ve frequently come across since March 2020.
No one is going to buy in a COVID market- especially if I’m forced to shut down due to restrictions.
Many sellers have made the mistake of assuming they couldn’t sell their business in a “COVID” market, however, we believe it is most likely one of the best times in the current climate to list your business for sale. Why? There are a number of contributing factors as to why this is actually a good time to sell but the two biggest points that now drive buyers are:
1. Your sale campaign has far less competition as most are holding off from listing their sale now so there isn’t that much choice and competition to compete for buyer’s attention.
2. The unemployment rate is currently over 7% and predicted to further skyrocket once Job Keeper is cut. All these people suddenly left unemployed are forced to consider “buying a job”.Businesses in industries that have been forced to shut down are also getting some love from the market! Who would buy a shutdown business? Savvy investors or operators already in the industry are taking advantage of this opportunity to invest and expand their investment portfolio. In the beauty industry especially, we are seeing high demands from existing operators looking in certain areas to expand whilst pricing is sometimes below what set up costs would be.
The “COVID” market is only one market trend or patternThe “COVID” market is one of the most unique and difficult markets to predict and navigate through. Why? Because nobody knows how the virus is going to behave from day to day. Whilst there are many trying to predict the virus patterns by looking at other countries overseas, there is no way to predict the virus because it depends on how the population handle the spread. No two countries or states for that matter are the same. For this reason, the “COVID” market can literally flip and change in 24 hours. It is one of the biggest roller coaster markets we have seen in the modern world. We ask that you please reach out to your agent anytime there is a change in restrictions, case numbers etc where you’d like to discuss the potential impact. Our agents will be able to keep you informed with the high’s and low’s of the market whenever you want to discuss any issues or questions you may have. Please keep in mind however, that news can change with any announcement made and differs across each industry.
“I don’t want to drop my price yet- just bring me all offers and I will consider them”
Agents know that most sellers are reluctant to ever give us their “bottom line” price. There are a number of reasons behind the psychology of this, but the biggest factor is that sellers believe agents won’t try harder to get a higher price if they can choose the “easy” sale. Whilst this has and always will be one of the biggest blunders sellers can make, we have adapted to working within these parameters in a normal market. In the COVID market, however, this can single handedly determine whether you sell. Buyers in this particular market are primarily price-driven– what does that mean, you ask? Most of the leads we get at the moment are from buyers who are looking for businesses based on their price budget. Some are looking for certain suburbs or industries but almost all of them begin with price. A typical conversation with a new lead now is “What Cafe/Takeaway business have you got in the South East under $50,000”. If you haven’t updated us with what your bottom line price is, then you most likely run the risk of not being on the list for a lot of potential sellers! It is crucial that you let your agent know (via email or SMS so we have a paper trail) what your bottom line is and update us anytime it changes. You may be set on a certain price today and then next week an announcement is made that impacts your business or family- you need to let us know when your bottom line changes every time.
You can’t inspect during COVID
Restrictions change frequently however we follow the guidelines of REIV and stay regularly updated. At any time where an inspection is not recommended we successfully use technology to assist a potential buyer. Zoom meetings, face-time live video tours and even compiling videos of a walkthrough are some ways in which we ensure no business is handicapped in a sale. As a seller, you can also help us by sending photos of your business room by room which we can use to send to any potential leads. The health and safety of our community are at the forefront of all our procedures.
“I’ll give my agent documents and updated information when they have a serious buyer”
The COVID market has not only put a strain on the business, but it has also impacted our personal lives. Many of us are left trying to work, handle staff, pivot our business and homeschool and the days are just not long enough. The last thing you want to do is sort through documents and email your agent late at night when you’re exhausted – we totally get it! It’s important to remember however, the agent can’t represent you effectively if they have no idea of what changes have occurred in your business since COVID. We need to know any changes to your rent, trading hours, staffing etc in order to be able to represent you to the market accurately.Buyers expect to see all documents for the business including details of turnover during COVID- usually broken down weekly. If you don’t have this information – the buyer will 80% of the time move on. It’s important to remember most buyers are working from home and or homeschooling so they prefer email communication. Face to face or over the phone in the COVID market is not the primary communication method. As agents, we have adapted to what the buyers need, however that means- now more than ever, documents are key to gaining their attention.If you are committed to selling, there is no way around this. You must provide the information and documents to your agent.