How did the pandemic change small business sales?
If you want to understand how the pandemic disrupted the small business-for-sale marketplace, the story is in the numbers.
According to data compiled from our listings, prices of new businesses spiked 12% over 2019 levels. A lot of business owners became very eager to cash out after public health restrictions put a lot of businesses in a precarious spot. Many who were planning to retire decided that 2020 was the time.
These pressures tilted the market in favour of buyers. Seller confidence dropped, and the average time a listed business spent on the market grew.
But there was a silver lining: Buyers never hit pause. While many sellers were deeply concerned about the future of their businesses, buyer confidence in these business opportunities increased. Interest rates plummeted, giving them greater buying power and, according to one survey confidence hit an all-time high of 60 on a 100-point scale.
The most sought-after businesses were those that found a way to thrive during the pandemic—those that are “pandemic-proof.” But it turns out that category is larger than many expected.
The pandemic revealed what makes a business valuable. In this series, we’ll show you how you can use those insights whether you’re selling a small business or buying one.
Over each of the next three weeks, we’ll be looking at three critical insights, in detail:
1. Why so many businesses haven’t been built for long-term success (and how to begin to address that)
2. How, when you sell, to better utilize a business’ time on the market (and what buyers should watch for)
3. How the pandemic shifted the digital side of running a small business
We’re very fortunate that the pandemic is ending in Canada and “business-as-usual” appears set to return. But, as the saying goes, never waste a crisis. By examining the difficulties of the last year, we hope to be able to equip more small businesses to thrive.
Opinions expressed here by Contributors are their own.
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