3 Tips for Business Owners and Business Sellers – July 2020

3 Tips for Business Owners and Business Sellers – July 2020

Since the outbreak of Covid-19,  the business brokerage / investment banking world seems to change dramatically every 30 days.

As we enter the middle of summer, here are three tips we are giving business owners and business sellers:

 

1. After the 30 to 45 Day Shut-Down Starting in Mid-March, There is a Market Again  

But, banks and institutional lenders have gotten much more cautious, taking marginal buyers out of the market.

We are qualifying prospects more carefully so we do not risk wasting a lot of time on transactions that cannot be financed.

We do recommend that if you receive a good offer, take it seriously as it will be harder to obtain as many offers as before this started.

 

2. Run Your Business Like You are Going to Own It Forever Particularly During a Sale Process

Your best negotiation strategy is that you are making money and will keep running it if you must.  Be profitable every day.

Clearly, due to current circumstances, some businesses cannot do that.  They should not sell at this time unless they do not have a choice.   Unfortunately, there are going to be a lot of unavoidable bad outcomes due to Covid.

If your business is in the middle ground, make the tough choices and get pricing up if necessary. Always work toward having your costs in line with your likely revenues.

 

3. Good Companies will Attract Buyers

The discount you will need to give from your February 2020 price is going to depend on the uncertainty in your industry, your supply chain, your customer concentrations etc.

The sense of risk has been elevated.  How high that perceived risk is will vary from no perceived increase in risk with liquor stores to incredible going concern risk with high end sit down restaurants.

Most businesses are somewhere in the middle and it appears they can sell with price reductions that make sense compared to the increase in risk.  Buyers and sellers may consider forms of risk sharing through earn outs and the like.

If you would like to learn the value of your business as you make important decisions, please connect with us. We would be happy  to discuss your business’ market appeal.

 


Clients choose Harvest Business Advisors for our accurate business valuations and our proven ability to deliver the highest price in the smoothest sale transaction possible. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

 

CDC Releases Draft Guidance for Reopening Businesses, Restaurants, Bars

CDC Releases Draft Guidance for Reopening Businesses, Restaurants, Bars

The CDC has released draft guidelines for the President to review and approve outlining measures to be taken by businesses as they reopen.  Specific sections address businesses with Vulnerable Employees (page 10), Restaurants and Bars (page 12) , Child Care Centers, Schools and Day Camps, and Communities of Faith.

Click here for CDC Interim Guidance for Opening Businesses.

The guidance is very detailed outlining three phases.

Phase 1 suggests strict social distancing, closing common rooms like break rooms, telework, and other restrictions.

Phase 2 suggests moderate social distancing, shifts for common rooms, maintaining telework, etc.

Phase 3 is closer to the norm although limited social distancing is still suggested.

These guidelines are subject to change as there are many concerns about their work-ability.  Namely, can social distancing be maintained and other suggested requirements?  How are health checks performed while still maintaining required confidentiality? We are sure this will all be clarified over the next few weeks.

According to the Washington Post, the bulk of these guidelines are expected to go into effect sometime over the next seven days or so.

 


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

Articles and Data Relating to Your Business and Coronavirus

Articles and Data Relating to Your Business and Coronavirus

Harvest Business Advisors have created this collection of current articles that may be of interest to sellers, buyers, business owners and advisors relating to Coronavirus, industry and the economy.

We are always available to discuss how this might impact you, those close to you, and your business.

We hope you find these helpful.


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia.
Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

More on SBA PPP and Disaster Recovery Loans

More on SBA PPP and Disaster Recovery Loans

Update on Small Business Administration Paycheck Protection Program (PPP) and Other Disaster Recovery Loans

Last Friday, April 24, 2020, President Donald Trump signed the next coronavirus relief bill providing another $310 billion in funding.  The Paycheck Protection Program (PPP) loans feature forgivable 1% interest loans for companies with up to 500 employees.  The loans are forgivable if certain payroll payment conditions are met totaling at least 75% of the money lent.

If you have not applied, Google your bank and call your business contact.  Apply today as funds will run out quickly.

We’d like to share an exceptional webinar featuring Al Titone, SBA District Director sponsored by the New Jersey Business Industry Association  (NJBIA) on the topic for those who want to know more on this topic.

‘A Business Owner’s Guide to Loans’, Al Titone, SBA District Director of New Jersey, joins Robbin Caruso and Edward Rigby (of Prager Metis)  to demystify the SBA Loan process. Titone discusses key features of the loans available to the business community.


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia.
Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

SBA Small Business Disaster Assistance – Coronavirus

SBA Small Business Disaster Assistance – Coronavirus

With the rash of business shutdowns due to the coronavirus it appears that many small businesses are going to have short term cash flow issues.  The SBA is offering disaster assistance loans that are likely to equal 3 to 6 months working capital needs.

Some links that may be helpful are below.

A blog run by Ami Kassar that has lots of helpful hints for obtaining SBA loans.  Most recently coronavirus related disaster loans.  https://tribe.multifunding.com/user/akassar

Ami Kassar is providing webinars on obtaining SBA disaster assistance due to the Coronavirus.  https://9buq9bpp.pages.infusionsoft.net/

Small Business Administration (SBA) website link for applying for disaster assistance working capital loans.  https://www.sba.gov/funding-programs/disaster-assistance

If we can be of assistance please call any broker at Harvest Business.