Is now the time to buy or sell a business? With so many businesses closing their doors during the coronavirus outbreak, you might think the answer is ‘no’.
There’s no denying the current economic situation is dire; however, a recent survey has revealed that buyers and sellers are still in the market and the future is brighter than you think.
In fact, with many Australians losing their jobs due to coronavirus, it’s likely that many more will be keen to buy their own businesses.
Zoran Sarabaca, Founder of Xcllusive Business Sales, spoke this week about his company’s recent Buyer Confidence Survey and State of Business Sales Market Report, shedding light on whether now is a good time to buy or sell.
“This is very important data that I am keen to share because the situation is not as bad as you think. It’s true the number of enquiries we are receiving from potential buyers has decreased between March 20 and Easter. However, this happened after the GFC and business sales recovered,” he said.
“The number of enquiries we are receiving has dropped nearly 50%, but it’s now stabilised.
“Currently the majority of enquires are for businesses generating $100,000-$300,000 profit, the type of business someone buys to replace a job. Buyers for larger businesses, are also still there, but are looking for strong businesses and ones which are expected to bounce back after lockout.
“In our recent buyer survey, around 13% said they would buy a business to gain employment whilst another 30% want to change their lifestyle. A further 32% are investors and 21% are business owners looking for an acquisition to expand their current businesses.
“Due to the rise in unemployment, we expect the segment of buyers looking for ‘job type’ businesses to increase.”
“The majority of respondents (85%) believe it will take 6 months to recover, and 51% say recovery will be slow. Interestingly, 32% say they see opportunities for businesses in the current environment; only 7% say they are no longer interested in buying a business.
“We also asked if respondents would consider buying a percentage of a business now with an option to buy the rest when the situation resolves – 64% said ‘yes’, so this may be an option moving forward.”
If you’re looking to sell your business, take note: whilst profits may be down, serious buyers are still looking. The two main factors they are seeking are low fixed overheads relative to sales levels and a good forward plan.
“There’s never been a better time to reduce your overheads so start preparing now to attract business buyers,” said Zoran.