Spring into Action: Get Your Business Ready to Sell

Spring into Action: Get Your Business Ready to Sell

Spring is officially here – and the anniversary of some of the first lockdowns. Although we may still be living with some restrictions in the Boston area and with the residual effects of COVID-19, the future is bright. Across multiple cultures, spring represents a new start and new beginnings. Is there a better way to honor the season than selling your business? This may have been your plan for over a year, and we are here to tell you that now is the time. Of course, before listing a business for sale near Boston, you are going to need to determine what your business is worth and get it ready to sell. Let us take a deep dive into how to look at value despite COVID-19 in the Boston area.

You might be thinking, 2020 taught me that nothing is certain, how can we develop credible economic forecasts while we are still deep within the negative effects of the pandemic? Well, the thing is, we had not previously lived through COVID-19, but we have survived other major economic uncertainties. Economists and seasoned valuation professionals understand what must change and what should be measured during a recession or depression. The key is to determine what industries drive our community, what changed for major markets this past year, and what stayed the same. At the end of the day, our communities in and around Boston still needed to survive, even if they spent more time in their homes.

Valuing a Business in a Pandemic Economy

As you can imagine, no one is directly blaming you for any loss of profits during unexpected business closures. Not only did our local government leaders enforce strict lockdowns, everyone needed to keep themselves, their families, and their staff safe during the uncertainty. To conduct a business valuation in an almost post-pandemic economy, we must consider the following:

·         Significant loss of customers and/or suppliers

·         Impact on labor resource (i.e., multiple layoffs to stay afloat)

·         Regulatory changes

·         Canceled contracts

·         Supply interruptions/closures

·         Tax or small business loan changes

·         Government interventions

A business valuation is intended to inform a potential buyer of the future profit for their investment. The question then is whether or not we should include those less-profitable quarters in a valuation. In this unique scenario, business valuations may instead record profits on a month-to-month basis. Not to mention, what changes were made in the structure of your business to ensure it could run during the pandemic. For instance, switching to curbside pickups or deliveries, promotional sales tactics as a marketing upgrade, or online retail options for ease of shopping for the immunocompromised.

In essence, there is no reason to wait for things to “go back to normal” before selling your business in the Boston area. It is important to acknowledge what your business has been through, and what you did to survive. Why? Well, it is hard to predict when things will feel more like pre-2020 again and an interested buyer will want to know that the business is viable despite everything that has happened in the last year.

Do not delay your retirement or entrepreneur plans because of COVID-19. Contact the local business brokers at Transworld Business Advisors North Boston – you can count on our experienced team to walk you through the preparations needed to list your business for sale. We know the area and we know the industries in our area.