The COVID-19 pandemic has led many business owners to re-evaluate their exit timelines. For some, the pandemic is speeding up their exit plans; for others, it is delaying them. If you are a business owner and are thinking about selling your business, here are seven things to consider:
1. If you own an essential business, now may be the time to sell. Businesses that are succeeding in spite of the pandemic are in high demand.
2. If your business is struggling during the pandemic, look for ways to pivot your business and improve your cash flow. Your business is only as valuable as its earnings.
3. If your business is closed, consider selling your business assets like inventory, supplies, and equipment. It may not make sense to continue paying rent or take on more debt when the future is still uncertain.
4. Be prepared to sell tomorrow. Even if you are not planning on selling, it is always important to have good financial records as proof of your profitability.
5. Business value is directly tied to performance. If the performance of your business continues to decline, so will your business value. Consider whether you are willing and able to put in the work to ensure your business will retain its value.
6. The way businesses are valued has not change. Businesses are generally valued on a multiple of earnings, and if your business continues to be profitable throughout the pandemic it is likely to command a strong price.
7. Consider your personal circumstances. Eventually the pandemic will subside, but it is up to you to decide if you want to continue to put time and effort into maintaining the success of your business in times of uncertainty or if exiting now may be a better choice.
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