The pandemic has put lots of things “on hold” including business transactions. Many business mergers and acquisitions have been cancelled or postponed because of the risk associated with Covid-19. The value of businesses has also been affected. The value of some has increased while others have decreased.
Financing an Acquisition During a Pandemic
Buying a new business almost always brings about some degree of financial uncertainty. During the pandemic, however, this is even more the case. One way to give yourself a little added financial security is through creative financing. Some options include seller financing, longer repayment terms, or payments based upon the company’s financial performance. Before making an offer, make sure that the financials are accurate. During Covid-19, some data reported on the income statement could be misleading. For example, most e-commerce businesses have experienced unusual revenue increases because of the pandemic. This would show an extraordinary increase in profits, which is not truly accurate. Make sure to see all the facts in the context of the pandemic when performing the due diligence.
Managing Your Business Acquisition After the Pandemic
There may be changes in laws and regulations in the future as a result of the pandemic. This could affect how you do business in the upcoming years. It could also change the financial outcome of the business. Structuring the business and creating a positive work environment after a business acquisition will take some effort. However, with planning and hard work, you can build a strong, productive team that is profitable and enjoys working together.
Part of your success will depend on your having resources available to assist you in every step of the acquisition process. Our team is here to help you acquire the business and to support you in its continued growth and stability.
For any questions do not hesitate to contact Mergex.