If you feel like the world has been turned upside down and everything's a little bit wonky, you are not alone. Welcome to the "new normal" post-2020 small business world.
As if it wasn't hard enough to navigate small business leadership under "normal" circumstances, we now frequently find ourselves wondering if we're living on another planet. Frequently I'm so speechless that I can only mutter an astonished, "we're living in wild times".
One of the problems small business leaders like ourselves are experiencing is not knowing which way to turn and how to stay grounded amidst all the turmoil. Although I don't have a magic pill that will solve these uncertainties for you, I do have a few hot trends you'll benefit from knowing about as you furtively navigate your small business leadership during 'unprecedented' times.
Stimulus funds are a blessing and a curse.
Small business owners collectively breathed a sigh of relief when stimulus funds brought about through the CARES Act were approved and arrived in bank accounts across the USA. Although they are providing much needed grease to keep the wheels of small business operations running, there is a cog in the wheel that many are unaware of.
For business owners actively exiting their business, escrow accounts are being set up to hold money equal to the stimulus funds they've received. In plain speak, since the government and lenders are still working out the next steps of forgiveness, no one really knows how stimulus funds are going to be treated. That means many business buyers (and their investors) are requiring escrow accounts to be set up to hold funds equal to the stimulus payments until this question is definitively answered.
Setting up an escrow account is a logical solution to a complex challenge but it does create additional stress and pressure for a small business owner trying to sell. First, if the small business owner had access to that kind of cash to put into escrow they may not have needed the stimulus funds in the first place! And two, even more of their hard earned cash is tied up for, as of now, an indefinite amount of time.
Buyers can get 6 months of their business loan paid for by the SBA!
As a business broker, I get asked all the time these days, "So, how's the market?" Many would assume that small business sales have come to halt but that is untrue. I would argue that some of the best small business investments are being bought and sold during these challenging times and if you're a business buyer, the market is hot!
Ironically, we find ourselves in both a buyer's and seller's market. One of those reasons is that the SBA has really sweetened the pot for small business buyers and that opportunity is being passed onto seller's through the transaction.
For qualified buyers, the SBA is offering to pay the first six months of your business loan! AND they are increasing the guarantee from 75% to 90% which means in some instances you could buy a business for only 10% cash down.
Like I said in para 1, we're living in wild times, y'all!
We're seeing a rise in "done with you" exit planning services.
Of all the things we are experiencing in small business markets right now, this one is probably the most logical and easiest to understand. As small business transaction markets become even more complex, the need for a trusted advisor and guide becomes even more valuable. So, we're seeing a rise in advisors offering small business leaders exit planning advice and services.
Much like the variety of small business owners these tools have been created to serve, there's 'different strokes for different folks' — meaning, choices of how you prefer to consume the content.
I believe it's important to not that like a good Texas pico de gallo recipe, the main ingredients of exit planning and building value in your business remain unchanged. Each chef simply adds their own secret ingredient and flair.
Here are a few that might appeal to you (in no particular order):
1. Exit Oasis
2. Prep to Sell (affiliate link)
3. Exit Map
4. Exit Plan Coaching Intensive (my own personal offering)
5. Value Builder
Are you feeling overwhelmed? It's okay to not be okay. Book a free (no pitching!) call now t identify the support you need.
Where are you at in your business journey? What are you waiting for?