Selling or buying a business during the pandemic

| 1 min read

We are more than a year into the pandemic, many buyers and sellers are interested in knowing whether they should buy a new business or sell their business during the pandemic. The pandemic has given arise to challenges to trading conditions and the risks associated with business sale remain uncertain. In this chaos, some industries are struggling, whereas some are unexpectedly booming.

There are several issues to be considered if you are planning on buying or selling a business during the pandemic. In this article, we will take you through the important thing you need to keep in mind.

Is the market favouring sellers or buyers?

The pandemic has brought about a sudden emergence of an aggressive buyers market.

Quite surprisingly, there has been a discernible increase in interest to acquire new businesses due to some prospective buyers who were sitting on cash and looking to make investments as competition has significantly reduced in comparison to the previous couple of years. The likelihood of getting into a bidding war has been significantly cut down.

The uncertainty surrounding Brexit and the pandemic has increased people's likelihood to negotiate lower prices to get faster returns and a quicker exit.

While the coronavirus is showing no signs of easing down, buyers now have a chance to grab competitive and secure deals which would ordinarily be snatched by people making higher bids. The changing public health guidance is influencing the market and asset value.

A vast online marketplace

Businesses such as pubs, restaurants and hotels were instantly shut down and have seen decreased interest, there has been a noticeable increase in interest in tech and e-commerce businesses as well as convenience stores, pet shops and petrol stations.

How to prepare your business for sale during the pandemic

The market is crawling with buyers who have the necessary cash and financial backing for a suitable business. Buyers are interested in knowing how well your business has performed during the pandemic. You can ease their worries by granting greater transparency during the due diligence stage to edge them closer to agreeing to a deal.

If you can show that your business has been able to avoid ever curveball thrown at it by the pandemic, you will provide buyers with the assurance they need to come to an agreement. You want to showcase your risk management strategy by showing buyers how the pandemic has effected your supply chains, customer base and employees.

Selling due to retirement

Workers approaching retirement age with entrepreneurial minds are looking to set up shops and non-conventional workers who had been searching for alternative working, both have used this time to rethink and plan to achieve their next milestone. This has meant that buyers and sellers are in a good position to strike at this opportunity.

Both sellers and buyers have had to adjust to a marketplace that is still recovering from the initial dip in consumers demand caused by the pandemic. However, it has resulted in sellers finding innovative ways to overcome the trading pressure and tougher businesses with better and stronger infrastructure.

Please note that the information provided on this page:

  • Does not provide a complete or authoritative statement of the law;
  • Does not constitute legal advice by Net Lawman;
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  • Does not form part of any other advice, whether paid or free.
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