2020 is behind us, and this new year has brought some good news amidst the lingering uncertainty. With that comes the inevitable feeling of hope, and perhaps even excitement. Did you have plans this time last year before lockdowns began? Were those plans put on hold for the last 12 months? Believe it or not, you are not alone. As a small business owner in northern San Diego, we understand you felt the weight of the world on your shoulders. To keep your business afloat was not just about you, but also the families affected if your staff lost their jobs. Although tough decisions were made, you did everything you could to survive. These hiccups and disruptions that led to updates and meaningful changes are what got you to where you are right now.
Although California still finds itself in and out of lockdowns every day – there is light at the end of the tunnel. Social distancing, mask mandates, and increased availability for vaccinations means a normal world is on the horizon. And this means your plans to sell your business can become a reality. Whether it is retirement, health, or just a desire to try something new, it truly does not matter. The first step to selling your San Diego business, no matter the reason, is to value your business.
How to Value a Business Post-COVID
The first step is to organize your finances. Although this is always the first step – it is time to stop using your business as an expense account. To really see the profits during this season, do not treat your business like your personal checkbook. Potential buyers need to be able to get the full scope of the worth of your business so you must present all the information available. You will need to recast your expenses to exclude any unnecessary of non-business-related expenses.
Secondly, you will need to identify potential risk factors. After a year like we have had, those are probably easier to determine. With the help of a business broker, you can not only find them but even remedy them before listing.
Finally, break provide an explanation illustrating how your business survived or remained successful during the pandemic. As you can imagine, buyers are well aware that the future can remain uncertain. This means that they will only invest in businesses that have proven to survive a crisis. Whatever changes you made this past year that helped your business grow will be seen as extremely valuable. Talk to your broker about how to best present this to buyers – i.e., offering free delivery, adding new pick-up options, offering mobile ordering, etc.
At the end of the day, nothing should keep you from taking that important step forward. You can sell your northern San Diego business during a pandemic if that is what you want to do or you can start to prepare now for when you’re ready to sell, post-COVID. Our business brokers are well-versed in all industries in the San Diego area and understand that the pandemic has created the need to look at the value of businesses differently than in the past. Contact Transworld Business Advisors San Diego North today to get a free valuation consultation – our experienced team of brokers is ready to help.