The Valuation Question – 4th Quarter

Back in May, during the first phase of quarantine and the initial shock of COVID, I wrote a post called the The Valuation Question – Pandemic Edition, discussing how the pandemic would affect the valuations of main street businesses. At that point, small business transactions were down 40% overall.

The idea was that these businesses would fall into three categories, or “buckets,” as the pandemic wore on – those that thrive, those that fail, and those that fall somewhere in between. Now, several months later, we have some statistics to help put things in perspective.

According to a recent survey by BizBuySell, the internet’s largest business for sale marketplace, 18% of small businesses have seen and increase in business. Of course, these are the businesses deemed “essential” that never had to close. I currently have two in contract, a liquor store and a pet supply store.

Meanwhile, 14% of small businesses have had to close permanently. Restaurants lead the field here. I’ve listed several restaurants that were attractive pre-pandemic, but have been forced into bankruptcy.

That leaves 68% of main street businesses that expect to return to pre-pandemic levels within a year. For these business owners, who have had the financial health of their businesses tested, now is the perfect time to have a valuation done.

Call South Florida Business Brokers by Sunbelt for a free valuation. (754) 300-8651.

The Valuation Question – 4th Quarter

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