COVID-19 Impacts on Business Transactions
BizBuySell’s 2020 3rd quarter insight report includes statistics on Covid-19 impacts on businesses for sale in 2020. We’ve highlighted a few points from the report below. Read the full report here.
As of April 2020, sales of businesses were down 51% year over year. By July the year over year deficit was only 21% and as of September it was 5%. This shift appears to be based on consumer demand. Those looking to purchase small businesses believe they can get a better deal now than they could a year ago.
Not surprisingly another impact of COVID-19 is that business owners’ confidence in selling fell. Most believe they could have gotten a better value for their business if they had sold in 2019 vs 2020.
However, the median sale price for businesses considered “essential” increased by 20%. Those businesses that are by nature “pandemic proof” (liquor stores, pet supply stores, grocery stores, fast food chains, etc) have not decreased in value this year.
One final interesting note is that baby boomers, whose group has been the main supplier of businesses for sale, have chosen to re-evaluate lately. Because of the pandemic and the unknowns surrounding it, many have chosen to hang on to their businesses for the time being.
If you’re considering selling your business and need advice or a business valuation, contact us. We’d love to help.