Business Sales Report Holiday 2020

The fall business sales market has been an active period. According to bizbuysell, there were just 5% fewer deals in September 2020 compared to a year earlier. The main reason is increased buyer demand along with banks willing to take on SBA loans again. The most sought-after businesses continue to be the essential business type. This means being pandemic proof and performing well such as an automotive or janitorial business, or a liquor or grocery store. Buyer activity continues to be heavily dependent on how Covid-19 impacted the business.

There is also plenty of interest in businesses that have adapted their model during Covid-19. If the business has pivoted in a way that provides lasting profitability and added margins, it is in great shape to demand a higher price multiple from the market.

Business asset sales, where the buyer is not purchasing an operating business, but is purchasing a portion or all the business’s assets such as inventory, equipment, supplies, furniture and fixtures, and real estate leased or owned continues to be in demand from buyers. In addition, businesses that own their real estate remain a hot item.

Advice for sellers is to have a monthly P&L put together as soon as possible for 2020. The more detailed the better, as buyers will ask for comprehensive detail about the sales and expense numbers, as they plan ahead to a post-covid 2020 world.

With buyer traffic high during the fall months, there is optimism for a robust January 2021 with a vaccine for Covid-19 on the way. Buyer demand should continue to remain elevated with high unemployment. The amount of listings on the market should also pick up in January, as many business owners that were on the fence about selling decide to finally list their business. Another reason that could certainly boost the number of businesses sold in 2021 would be an additional stimulus package by the SBA that encourages business sales.