Buyer & Seller Opportunities in a COVID Economy

Buyer & Seller Opportunities in a COVID Economy

COVID, of course, has completely changed the economy as we knew it. Business revenues, employment rates, and industry performance we saw in February had dramatically changed by the end of April and more so in the months after. As the end of the year approaches, what have we learned? We have learned that anything is possible, and everything can change overnight. The only certain thing is that nothing is ever certain.

It is amazing how we have all learned to adapt. It has also been interesting to witness the new opportunities that have surfaced in the COVID economy for both buyers and sellers. As business brokers, we have been fascinated to watch as some buyers and sellers take advantage of COVID, while others have not been able to adapt.

Buyers: COVID-related Opportunities

Depending on the industry, business buyers have had a unique opportunity to take advantage of a distressed market. Some businesses are up for sale because owners need the cash immediately, while other businesses are up for sale because the owners have decided the COVID related stress is just too much for them. This means that owners are often willing to accept lower prices and offer more aggressive terms than they would have offered prior to COVID.  Many of these distressed businesses are expected to recover quickly as the COVID vaccines begin to do their job. We are seeing many experienced buyers recognizing today’s opportunity and they are in the process of acquiring new locations in the most distressed of industries. Another bonus for buyers, landlords have finally become more flexible as they are faced with potentially vacant space. Generally speaking, we are seeing experienced business owners taking advantage of the current market to increase the number of businesses or locations that they have in preparation for recovery.

Sellers: COVID-related Opportunities

Because buyers sense that there are deals available we are seeing more buyers than ever in the market to purchase a business. Many of these buyers are existing business owners and are cash buyers prepared to move quickly. They understand your industry and they understand the impact that COVID-19 had in 2020. They are less concerned about 2020 and more concerned about prospects for 2021. They are focused on location, lease terms, existing equipment, leasehold improvements, customer base, and employees. The key is that they move quickly. Last week we completed a sale in just 14 days from the time the offer was accepted by the seller to the time he received payment. Both the seller and the buyer were thrilled. The buyer got a good business and a good deal while the seller was paid a fair price for his business and also had his lease assumed by the buyer. Distressed businesses are selling.

It is also interesting to see that businesses that have proven to be COVID-19 resilient are currently in demand by more conservative buyers. These businesses are often receiving a premium price because of this increased buyer demand for COVID resistant businesses. If you own this type of business this may be an ideal time for you to sell.

Regardless of which end of the deal you find yourself on, our team of experienced business brokers at Transworld Business Advisors Houston are standing by to assist you. If you are interested in purchasing a Houston business, our brokers will help you find the industry and business that meets your needs and interests. If, on the other hand, you are trying to sell your Houston business, we are here to help you find the perfect buyer. Contact Transworld Houston today!