With the effects of COVID-19 still impacting businesses, it may be hard to find a silver lining. Add the recent problems with the supply change and the picture can become even more disheartening.
However, the delays in early 2021 – and for most of 2020 – have actually given rise to an increase in buyer demand when it concerns the purchase of small businesses. At the same time, sellers are also feeling more confidence – it’s a simple case of supply and demand.
The rise in buyer interest can be traced to the dip in available seller inventory and lower prices which were the norm in 2021. Now investors and possible purchasers are showing regret, and making serious moves to finally pull the trigger.
Some interesting numbers about 2021 and the third quarter for sellers include:
With the renewed interest from buyers, and a smaller inventory of sellers, the result is a seller’s market – the old rule of supply and demand has never been more evident than this year.
Max Friar of Calder Capital provided additional insight into the current situation, and what to expect in the coming year, and into 2023.
“There are still fewer sellers on the market than there otherwise would have been due to COVID and post-COVID challenges,” Calder remarked. “However, we signed up more clients in Q3 than any other quarter and I feel strongly that burned out sellers are going to be coming out to market more robustly in 2022.”
Now that the experts – and Murphy Business – are definitely seeing a surge in the seller’s market, it’s time to consider selling your business. The reasons for wanting to sell can range from eyeing retirement to looking at other possibilities. Regardless of the reason you want to sell, it’s important to make sure you are prepared.
Remember, in a seller’s market buyers are looking to move quickly, and you also have to consider the fact that you’re competing against other participants. Preparation is the key to success.
We’ve created a checklist of the items and tasks you’ll need to attend to before going to market. You should create a detailed portfolio that lists your finances. Include a profit and loss statement, inventory, projections into the next two quarters, licenses, certifications, and tax returns are a necessity.
A business valuation should also be completed. Consider it an appraisal from an unbiased entity who determines the value of your business, the interest of the owner, security and intangible benefits of specified data.
Write a marketing plan that will help you advertise your business and put it in the best possible light. Don’t go overboard, but determine what selling points will appeal to buyers. Think about different mediums to place ads, like trade journals or websites that are related to your business.
Selling your business doesn’t have to be stressful and confusing. When you partner with a professional broker like Murphy, you’ll have instant access to qualified professionals who know the market, and the players.
The services we offer are proven and time-tested. Our team knows what works, and how to adjust and customize this process to fit your objectives.
Contact us today and take advantage of this seller’s market!