The overall economic impact of COVID-19 is still unknown but the immediate effects on the economy and our daily lives are truly detrimental. The economy has certainly seen its up and downs; these constant fluctuations have made running a business that much more difficult. You may ask yourself; how do you value a business during coronavirus?
To begin with, you need to understand the fundamentals of a basic business valuation. As you may know, it has everything to do with income, markets, and assets. This still rings true in the COVID-era, even if it looks a little different.
Rather than showing past success, since much of the economic fluctuations that have been brought on was completely out of your control, business valuations have become more forward-thinking. What is the future economic benefit to an investor? What were some creative ways you kept your business afloat during lockdowns and limited capacity openings? The mere fact that you survived an unprecedented hit, and perhaps even thrived, adds incredible value to your business.
During coronavirus, business valuations will ask the following questions:
- How did coronavirus impact business sales and profits?
- Are the impacts temporary or permanent?
- How long will it take to recover?
- Will the business be able to return to pre-pandemic levels?
- What impact did coronavirus have on the customer base?
- How did the competitive environment change?
- What is the plan to best position the business post-pandemic?
Overall, the future is uncertain but it can still be bright. Your ability to evolve with society’s needs and meet expectations is invaluable. This is why, during the coronavirus era, a business valuation is not as black and white. An experienced broker from Transworld Business Advisors can walk you through the process and help you determine the value of your business despite coronavirus.