Very few people thought we would experience a pandemic during our lifetime, but when the coronavirus spread around the globe in early 2020, very few of us could have predicted what was going to happen next. Schools being forced to close their doors, people advised to stay at home and the closure of many businesses was inevitable to help reduce the number of people getting Covid-19.
A lot of businesses didn’t know what to do, and the state of the world’s economy was devastating. People were made redundant and parents were struggling to put food on their family’s table.
Due to the vaccine rollout, it seems like more and more businesses are re-opening and going back to normal. However, others were hit so badly that they have been unable to keep their heads above water. At the moment, there are lots of established businesses for sale, and many investors are considering putting their hard earned money into a business that is struggling.
- The Cost
A lot of businesses that are struggling are sold for a fraction of the cost they are worth. When the owners find it difficult to pay bills, they are often desperate to find someone to take it off their hands. To make money, you are going to have to spend money, and if there is no money left to reinvest, making the business successful is almost impossible. Borrowing money from the bank, especially if you are running a business that is already in debt can prove difficult. In the current climate it seems money lenders are cautious about who they lend finances to, so businesses that can’t make a profit during the ongoing pandemic might have no other option but to sell up.
Businesses, even those that seem to generate a lot of money often find it hard to make a profit. Keeping a business afloat can cost a pretty penny, and a lot of investors are well aware of the amount of cash needed to make the business successful.
Investing in a business that is not already established can cost a lot of cash, and these businesses can often go over budget. Investing in a business, even one that is in crisis should cost a lot less than creating a business from scratch.
- The Staff Members
Business owners find it difficult to sell their business, especially if they have hard working, loyal staff members employed. However, for those looking to purchase a business, having employees on board who understand the industry can help get the business off to a flying start. Although you might want to retrain them the way you want the business to be run, they will be able to help you understand the business better. They can provide the new owner with plenty of information on how to be successful, which could prove key, especially if it is the new owner’s first time working in the industry.
Existing employees will sometimes know why the business went into crisis. They can help the new owner predict what the future will hold, and what mistakes should be avoided.
During the ongoing pandemic, a lot of very hard working people have found themselves unemployed, so keeping them in a position they have been doing for several years will help earn their respect and loyalty. Keeping staff members happy is vital to running a successful business, and it can help create a good working atmosphere in the workplace.
- Existing Clients
One of the hardest things about starting up a business from scratch is trying to establish a clientele base. By taking over an established business, you will also be taking over their existing clients. These loyal customers and clients can help you generate money from the first day you take over, and they could help you make a success of the company.
By speaking with these clients, they can help you understand why they use the business, how they feel the business could improve, and how to avoid going into trouble in the future. New owners might have to go out of their way to retain these clients, but it is a lot easier to retain old clients than finding new ones.
New owners might be able to gain access to clients the business has lost in the past. If the company still has their previous clients’ contact details, the new owners might want to make contact to see if they can get them to return as a client. Finding out why they stopped doing business with the company in the first place can help the new owner understand how to successfully run the company.
- Easy to get Finance
A lot of money lenders avoid giving people finance to start a business from scratch. Because of the risks involved, very few banks are willing to put up the money needed to start a new company, however, if the business is already established and it has existing clients, then a lot of money lenders will feel there is less risk. The early stages of a brand new business is when a lot of owners come into financial difficulty.
Even for businesses that are struggling, money lenders will often see past the current state of the business and look at it as a long term project. By lending money to someone who has a good reputation in turning businesses around, they will be more than happy to put up the money that is needed.
- There are lots of ways of Finding a New Business
For those looking to invest in an already established business, there are plenty of different ways of finding them such as:
- Auction: There are many physical and online auctions where people sell their businesses. Most of these auctions sell the business to the highest bidder. Some of these online auction places are designed specifically for those wanting to buy and sell established businesses.
- Brokers: There are professionals who help broker deals with existing business and people looking to take them over. Having a broker on board, especially employing someone who has plenty of experience can help get the deal done. For more information about investing in a business check out www.marcphillips.com.au.
- Word of mouth: A lot of people want to invest in a company when they find out a certain company is struggling to survive. Entrepreneurs see this as an opportunity, especially when they hear of a business that excites them.
Although newspapers do advertise companies for sale now and again, it seems most businesses for sale are advertised on the web nowadays.
Conclusion
It is not surprising that so many people are looking to invest during the pandemic, as they understand that it won’t last forever. Although it is very hard to predict the long term damage the current crises will have on the world’s economy, there are still plenty of businesses out there doing well. For a lot of entrepreneurs, the pandemic is viewed as an opportunity for them to invest a small amount of cash into a business that is failing to make ends meet, in the hope that in the long term it will prove to be a worthwhile investment.
About Carson Derrow
