Ah, 2022 - the start of a new year and all the hope that a new beginning brings. Even if January 1 didn’t bring you that shiny new slate you were hoping for, it’s never too late to start fresh and start planning for the year.
While we all hoped COVID would be long behind us by now, unfortunately we still have to deal with its business world impacts like closures, delays, and supply chain crises. But what does the virus mean for your business, specifically the sale of it?
COVID has had a profound impact on all of us and, unfortunately, the buying and selling of businesses is not immune from those impacts. Although business valuations have remained relatively steady and profitable companies are still being transacted daily, the overall industry has seen dips in some sectors.
For example, many buyers seem hesitant to buy small businesses within the restaurant and hospitality industry, given how hard these industries were hit during COVID. Currently, buyer inquiries are down across the restaurant, hospitality, and similar industries.
Simply put, buyers are adverse to businesses deemed “risky” during the COVID period over the past several years. Because of this, we’ve seen small restaurant and hospitality owners pivot. Restaurant owners have installed makeshift drive-thru windows, offered delivery, and enhanced sanitation practices to drive revenue. In essence, these businesses have either had to adapt or die.
But I don’t think it will always be this way.
In time, I predict that restaurant and hospitality businesses will come up with creative solutions to these “public germ sharing” challenges but implementing those solutions will take time in order to get back to pre-pandemic business levels. I also believe that businesses that institute these changes faster than others will reap the rewards of being early adopters.
What Should I Do During COVID to Prep My Business to Sell?
My top, standard advice is to get (and stay) healthy - both personally and professionally. Seriously. You can’t take care of anyone or anything else in your business if you’re not in a healthy state to do so. Take care of yourself while you take care of your business. While achieving personal health is fairly straightforward (a clean diet, adequate exercise, lots of water, etc), having a healthy business is a bit more complex.
I consider a healthy business to have the following:
But don’t look at this as an exhaustive list. If you’re looking to sell your business in the current economic climate, you need to talk to an expert. Luckily for you, I happen to know a great one (hi, I’m Katie) who offers free consultations through a simple click of this link.
During COVID, business owners who have leveraged stimulus money must have it properly documented and clearly organized with the appropriate professionals (think CPAs and bookkeepers) to make sure these extracurricular cash flows are easy to prove to any prospective buyers as well as their bankers.
During COVID, if a business owner has experienced a reduction in sales and wants to keep employees busy and compensated at pre-COVID wages, they might consider strengthening their business foundation and investing in the suggestions above that they feel are their greatest weaknesses. (True story: I know a retail business that was shut down during COVID for a time and instead of laying off employees, the owners had their employees help them with minor remodeling and clean-up projects. The owners were able to retain the employees and the employees were able to provide value to the business, even though it wasn’t “what they were hired for.” A win-win all around.)
For example, if your books are messy, invest in your team and take the adequate time to clean them up.
If you don’t currently have processes and procedures documented, pay your employees to write down what they do on a daily basis so that anyone coming in could learn from their notes.
If you have owner bottleneck challenges or customer concentration issues, consider investing in a strategic planning session for your leadership team to overcome these challenges. BONUS: these can be done virtually and an owner retreat can be turned into a staycation. Did I mention I recently completed my CEPA training? I can help book your next owner retreat!
We’ve covered a lot and you may feel a bit overwhelmed by the work in front of you. If you’d like to leverage any of these suggestions, reach out to book a discovery call and a personalized business owner retreat staycation blueprint to strengthen your personal and business foundations.