The Effect of the Pandemic on Small Business Owners

COVID-19 just doesn’t want to go away. 

While the push for vaccines has yielded positive results, cases are rising across the country – and reports show that the upcoming year will continue to be a challenge.

Obviously the effects of the pandemic have hit nearly every sector of the economy and the continued disruptions to supply chains has been felt by everyone as products become scarce and inventory levels are falling below average.

Small businesses were severely affected by the pandemic, which has forced a permanent shift in regard to online operations and the overall financial health. However, the result of the pandemic and its effects has contributed to a strong rebound in the buying and selling of businesses.

According to BizBuySell’s Insight Report “closed transactions in the third quarter are up over the previous quarter, and 11% when measured year over year.” That is a positive signal for owners who are looking to sell – increased demand translates into a seller’s market.

Other positive points from the report include:

• The median revenue of businesses sold in the third quarter was $671,713, up 6% year-over-year. 
• Buyers are paying record-high prices for businesses that have continued to perform well during the pandemic. 
• The median sale price in the third quarter hit a new high of $349,500, 17% above the previous year and 40% above 2019’s Q3 pre-pandemic levels.

With all of these figures to consider, small business owners looking for an opportunity need to move quickly. In addition, buyers need to consider all of their options, and working with the right team of professionals can produce results that are still affordable investments. 

“There are still fewer sellers on the market than there otherwise would have been due to COVID and post-COVID challenges. 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,” said Max Friar of Calder Capital.

Preparing to Sell

Now that we’re in a seller’s market – you need to prepare your small business if you’re thinking of selling and making a profit.

Over the past two decades, Murphy Business has worked with owners and operators who are looking to sell or buy. Our network of clients reaches across the country, and the professionals we employ are dedicated to providing customer service, along with expertly matching up buyers and sellers.

We’ve developed a list of best practices that sellers should follow in order to get to market quickly with the right positioning. 

• Prepare a detailed offering portfolio
• Arrange a business valuation
• Develop a marketing plan to sell the business
• Implement the plan and promote to potential buyers
• Negotiate offer to purchase or letter of intent
• Perform Due Diligence
• Finalize Closing through Financing and Funding

Murphy Business Can Help

At Murphy Business, we have experienced business brokers who know the market and can help you get the most out of your sale. Professional standards are our watchword, and we’ll stay by you through the entire experience.

Work with a business that knows all about business. Contact us today.