To Sell or Not to Sell? That’s the Business Question
The Australian Government is going to great lengths to ensure as many small and medium-sized businesses survive the coronavirus (COVID-19) pandemic as possible but it’s likely the entire ordeal is going to convince at least a few business owners that the stress isn’t worth it. The alternative then is to sell your business, but what does it look like to try to sell a business in the midst of a pandemic?
Michelle Wright, Principal Licensee at COMPLETE Business Brokers, says most of the selling will come later but stresses these are uncertain times. “Obviously there’s nothing to reference this event with so it’s hard to predict,” she says. “A lot of businesses are shut so no one’s going to be looking to sell for a while, everyone’s just going through that critical stage of trying to keep staff. It will be interesting to see in around six months when businesses open again, what everyone’s view on a business will be and whether there’s a lot of people looking for the buy-your-own job type business.”
The latter group comes as a response to those unfortunate enough to have lost their jobs, and who may be considering starting their own business as a way to have more control over their own employment in future. Wright believes there will also be a lot of buyers who recognise that property prices are going to drop and see that as an opportunity to invest.
Tony Hancock from Transworld Business Advisors echoes this sentiment, saying we’ll see an increase in both buyers and sellers at the end of the pandemic. “The market, while being flooded with many failing businesses, will also be flooded with many buyers who have put their purchase plans on hold in the uncertainty of the current shutdowns,” he explains. “This means smart sellers will be preparing their business now for when things re-open in a bid to be the best option.” Hancock adds that those preparations will need to focus on highlighting the business’ best attributes from before the downturn, and the potential it has for a post-pandemic market. “The good news is this current shut down period affords that time.”
As for what that preparation looks like, Wright points to getting your business affairs in order. “Spend this time getting all of your financial information about the business up-to-date, look at your processes and procedures, look at the things that add value to a business like having good documentation and ensuring all your employees are employed under the right Awards,” she urges. “Often business owners get carried away with the day-to-day running of the business, so now is a really good time for them to review their business plan and make sure all of those things are in order.” Finally, Wright suggests drafting up a new business plan so potential buyers can get a better idea of what to expect when the market reopens and we can all re-emerge from our stay-at-home quarantine and back into the world at large.