Covid-19 – What it means for Business Sales
July 2020 - The impact of Covid-19 on people’s lives, businesses and communities has and will continue to be influential for a very long time.
Globally, business owners and personnel have become accustomed to social distancing with the aid of working remotely, using appropriate technology to keep employees whilst maintaining to generate business.
At this stage, we are yet to observe any major adjustments to business sales. Many business owners who had been considering retirement before Covid, are now even more eager to sell.
The recent statistics in relation to buyer enquiries are well above usual levels. What highlights this statistic is that during May/June/July we have been handling a great deal lower levels of stock than what we would typically hold. In light of this, we would suggest that Covid-19’s impact on business sales to date has been small and the continual scenario of abundant buyers and low attractive business opportunities is evident.
The winners to arise from this pandemic are businesses such as online businesses, home/garden stores, supermarkets, hardware and home improvement stores and health and fitness businesses such as bike shops. Equally, the building industry seems to continue to remain solid however, this may change as advance contracts have slowed and new home sales have been significantly lower also.
Industries such as hospitality, tourism, retail, health, exporting and service businesses who haven’t been able to operate have been significantly impacted by this pandemic. It is predicted that many of these businesses will resume operation and bounce back as the borders re-open and we return to normality.
It is also predicted that many big box retailers and wholesalers will be constrained with stock supply, as China and large manufacturing facilities attempt to catch up with logistical delays and worldwide orders.
Even though demand remains strong from buyers for reliable businesses, the major constraint is buyers achieving finance approval. The 4 banks do not seem motivated to finance a large portion of business acquisitions and only the buyers searching at blue chip level are being considered. As a result, cash buyers are in a very good position to negotiate in their favour.
With the high demand for good sunshine coast businesses for sale and such an unprecedented shortage of stock, we would suggest that now is an opportune time to list and sell your business with Savvy. If you have been thinking of selling for a long time, don’t miss this opportunity given there is a huge shortage of profitable, resilient and solid businesses for sale at present.
One thing is for certain, Covid-19 has highlighted the Sunshine Coast and South East QLD as a well protected safe haven. As a result, we anticipate an influx of southerners heading north to capitalise on the advantages of our sub-tropical and progressive climate.
Employment for semi-professionals will be an issue if the Sunshine Coast and South East Qld continues to attract migration, particularly in the 40-60 yr old age group. There may be no other choice but to consider business acquisitions.
What we have witnessed so far with Covid-19 certainly highlights the fact that change is unavoidable. We still have a long way to go and we don’t know what the outcome will be.
If you are contemplating selling a business, now is a good time. We have an abundance of buyers looking and not too many opportunities to provide them. Remember, timing is everything!