Hitting the “Pause” Button:
Business owners seem to be either swamped or sweating bullets.
Businesses have definitely never been through a time like this. As of this week, over 33 million Americans have filed for unemployment, millions more are sheltering in place and staying home, and a whole new class of businesses – the so-called “non-essential” business – has been created.
Many essential businesses are absolutely swamped. Customers have prepared themselves for lockdowns by stocking staples, baby and pet care. How this trend will affect sales later on remains to be seen.
The lockdowns mean fewer trips to the store and decreasing shopping frequency; that means higher average transactions. Out-of-stocks across many categories in food, beverage and household supplies are dramatic, stressing the entire distribution channel. There’s also more food shopping online. Many grocers are reporting record sales through ecommerce, and this includes highly perishable foods – an interesting change brought on by the necessity of the situation.
But while some businesses – like food retailers – are struggling to keep up, with so much uncertainty, many other business owners are hitting the “Pause” button on decisions about their future until they can see, with a little more clarity, what it will bring.
This appears to be creating a backlog of business-for-sale opportunities hitting the marketplace, and how this affects the ability to list and sell a business in the future remains to be seen.
The fact remains that over 12 million baby-boomer-owned businesses will change hands over the next decade. The pandemic is simply causing a slowdown in the inevitable business-listing activity that eventually must occur. No business owner is getting any younger.
There’s a good reason for business owners to be cautious. Most have 80-to 90-percent of their assets tied up in their companies. Add that to the fact that only 20 or 30 percent of businesses listed on the market end up selling, those numbers could make any business owner nervous.
While there is good reason to be careful – it’s really important to be planful and proactive.
To start the conversation today, please give me a call at: 612-235-3511
Sunbelt Business Advisors