Should you sell your business during a pandemic?
Yes, my question is a provocative one.
For many business owners, words like “nuts,” “crazy,” and “absurd” come to mind.
Well, why not sell your business during a pandemic?
What if I told you that contrary to popular belief, to sell your business during a pandemic is the best time.
Who am I, and how do I know?
I was the kid who started his eLearning company right out of school with no money, experience, or team. The truth is, I had no business being in business, and the results showed.
It was my grit and passion that kept me in the business long enough to experience success. The first offer to sell my company came from an unsolicited offer from a wolf in sheep’s clothing.
I said “no” to a 7-figure offer based on three times EBITDA. At the same time, I said “yes” to mastering the art and science of selling a business.
I said “yes” to a second offer from a different buyer two years later. I sold my eLearning company for 9-figures and a 13-times EBITDA.
Yes, you read that right. My company value increased 10X even though I had the same company, people, and service.
The only question you should be asking is: can you sell your business during a pandemic?
Keep reading to learn why you can and should sell your business during a pandemic.
You have nothing to lose, and most important, everything to gain.
Why Timing Is Everything When You Sell Your Business During A Pandemic
In life and business, timing is everything – Jeffrey Feldberg
How true it is that in life and business, timing is everything.
The same principle applies when you sell your business during a pandemic.
When the world around feels like it’s falling apart, why sell your business during a pandemic?
The answer is that you can receive a higher value for your business.
Yes, you read that right, you can receive more money when you sell your business during a pandemic.
Speaking of a pandemic, maximize your pandemic downtime when you sell your business.
Read and prosper from “Top Advice For How To Maximize Your Pandemic Downtime That Will Make You Win The Day.”
To illustrate, let’s turn to one scene in the movie Forrest Gump. After the hurricane, the only shrimp trawler left is the one owned by Forrest Gump and Lieutenant Dan.
Gump and Dan lock in their fortune by having the only shrimp trawler around to meet market demand. Supply and demand at it’s best.
As in the Forrest Gump movie, a pandemic reduces the number of businesses for sale. As the supply of businesses for sale drops, the price that buyers are willing to pay increases.
Congratulations, you’re now in a sellers’ market.
With timing on your side, do you know what you must do next?
Do You Understand Your Future Buyer’s Mindset, Especially During A Pandemic?
Knowledge is of no value unless you put it into practice – Anton Chekhov
When you sell your business during a pandemic, understand your future buyer’s mindset.
Your future buyer is smart, sophisticated, and experienced. Every mistake you make lines your buyer’s pocket with your money.
Read and prosper from “Do You Know The 7 Mistakes Every Buyer Wants You To Make When Selling Your Business?“
To sell your business during a pandemic and prosper, you must have the right mindset.
Know this and know this well.
Your buyer derives your company value from emotion first. It’s only after the fact that your future buyer justifies your company value with logic.
Buyers aren’t buying your company today to sell it tomorrow. Pandemic or not, your future buyer may never sell your company. If your future buyer does sell your company, it will be years later.
Find out why your buyer wants to buy your company so you can position your message around the buyer’s need.
Don’t fall victim to believing your business value is lower because of the pandemic. Instead, play to how your strengths help to solve your buyer’s needs.
Nobody controls what happens around them. You don’t control when a pandemic strike.
You do control how you respond. To sell your business during a pandemic has the pandemic work to your advantage.
When you sell your business during a pandemic, you’re playing to the market strength.
What’s the market strength during a pandemic?
Fewer businesses for sale limits the choice for buyers and drives up your business value.
Once you understand the needs of your future buyer, you must do one other thing.
Do you know what this one thing is?
When You Sell Your Business During A Pandemic, Understand The Types Of Buyers You’ll Meet
When people talk, listen completely. Most people never listen – Ernest Hemingway
When you sell your business during a pandemic, understand your future buyer.
Your future buyer hopes you’ll make mistakes during the selling process.
Every mistake you make lowers the value of your company.
Read and prosper from “Exiting Your Company? Avoid These 5 Costly And Stupid Mistakes.”
There are three types of buyers.
- Strategic buyers will buy a company for talent or extend its capabilities.
- Financial buyers will buy a company in the hopes of selling at a profit in three to five years.
- Family offices are new on the scene and are a combination of strategic and financial buyers.
When you sell your business during a pandemic, you have two benefits:
- Access to higher quality buyers who have a problem your company can solve.
- A higher value for your company as a result of fewer companies for sale. You’re at the right place at the right time.
Some buyers have an investment fund that is on a use-it-or-lose-it timeline. If the buyer doesn’t invest the money from the fund, the money goes back to the investors.
Other buyers have cash in the bank and do not need outside financing. During a pandemic, cash is king. A deal that doesn’t depend on outside financing is as good as it gets.
Last but not least, are buyers from companies who continue to grow and prosper. For these buyers, buying your company helps solve a problem.
Don’t make the costly mistake of assuming that a pandemic is “bad” for everyone in the market.
Do you know the one other major benefit you receive when you sell your business during a pandemic?
Why You Must Get Ahead Of The Curve (A Different Curve) When You Sell Your Business During A Pandemic
Things may come to those who wait, but only the things left by those who hustle – Abraham Lincoln
During a health pandemic, the focus is on getting ahead of the curve.
When you sell your business during a pandemic, you get ahead of the supply curve.
No matter how strong or profitable your company is, your value is dependant on supply and demand.
A pandemic is a two-edged sword. For as many challenges a pandemic brings, there are also unique opportunities.
When you sell your business during a pandemic, you enjoy a once-in-a-lifetime opportunity.
The opportunity is being in a sellers’ market. In a sellers’ market you can negotiate and receive benefits you won’t get in a buyers’ market. And yes, you’ll also receive a higher price.
Don’t become a victim of the fallacy that you’re next company will be more successful.
The statistics tell a different story. Chances are your existing company will be the most successful company you create. Ever.
Smart business owners figure out how to pivot their business to profit during a pandemic.
Read and prosper from “This Is How You Pivot Your Business So You Can Conquer And Win.”
When you pivot your business to respond to a pandemic, you’re helping your customers. You create a win-win as your profits and company value also increase.
If you wait to sell your company after a pandemic, expect a lower valuation and less than ideal deal terms.
In business and life, timing is everything. You can’t time the market to sell your company.
When you sell your business during a pandemic, you get ahead of the supply curve and benefit (a lot).
What if you’re not ready to sell your company?
What Do You Do If You’re Not Ready To Sell Your Business During A Pandemic?
Plan ahead: It wasn’t raining when Noah built the ark – Richard Cushing
What do you do if you’re not ready to sell your business during a pandemic?
Read and prosper from “This Is How Successful Sellers Crush Their Exits.”
Yes, you missed out on a tremendous opportunity to sell your company at a premium.
In my books, the only time you fail is when you don’t learn from your mistakes.
Today is a new day filled with opportunity.
Ready to learn a little-known secret?
The strategies to sell your business are the same ones to help you grow your business.
When you’re prepared, you can choose to keep your business forever, or instead, sell it today.
The choice is yours.
What do you do if someone tells you that you can time the sale of your business?
Run in the opposite direction as fast as you can.
A case in point is a pandemic. Nobody knows when a pandemic strikes.
The business owners who took the time to prepare their businesses are the winners in a pandemic.
If you’d like to sell your business, how long does it take to prepare?
While you can learn the strategies you need in weeks, it takes two years to prepare your business.
The great news is that you can start your preparation today.
Start today, even during a pandemic, to put yourself ahead of other businesses.
Let the fact that you’re not selling your business during a pandemic be your cue to start now.
Today is a new day filled with new opportunities.
Make the most of the new day.
Sell your business during a pandemic, and prosper from a once-in-a-lifetime opportunity.
Conventional wisdom tells you that to sell your business during a pandemic is wrong.
In reality, conventional wisdom is wrong.
Who am I, and how do I know?
I was that kid who started his eLearning company right out of school with no money, experience, or team. I had no business being in business, and the results showed.
My grit and passion kept me in the game long enough to create success.
Success brought my eLearning company on the radar of a smart buyer who was a wolf in sheep’s clothing.
The buyer gave an unsolicited 7-figure offer based on three times EBITDA.
In saying “no” to the offer, I said “yes” to mastering the art and science of selling a company.
Two years later, I said “yes” to a different buyer with a 9-figure offer based on 13-times EBITDA.
My company’s value increased 10X even though it was the same people and service.
If you’re prepared, make the decision right now to sell your business during a pandemic.
Contrary to conventional wisdom, timing is on your side.
When it comes to selling your business, you have one chance to get it right, and you better make it count.
The choice is yours.
You can do it. I know you can.
Here’s to you and your success!
Your Biggest Raving Fan,