Much to everyone’s disappointment, the fourth quarter of 2020 has not brought an end to the COVID-19 pandemic. The future remains uncertain. Many owners who intended to sell in 2020 are not uncertain if they’ll even be able to sell this year. So what’s an owner to do if the pandemic has disrupted their M&A plans? Here are some tips.
Business owners must update their financial forecasting to reflect the current impact of the pandemic. Given how unpredictable things are, updating on a regular basis can help you remain flexible.
Some factors to look at when updating your forecast include:
- How stable is your supply chain?
- What is your current remote work arrangement? How well is it working?
- What COVID mitigation protocols have you adopted?
- What virtual security protocols do you have in place?
- Do you have insurance coverage for your directors and officers? Do you have business interruption insurance?
- How are you connecting remotely to clients? Is it working?
- Do you have a written employee retention plan?
- What is your diversity policy?
If you don’t have clear, specific answers to these questions, it’s time to get them.
Be Prepared to Move Quickly
You must be positioned to make quick decisions that preserve value. For instance, if you anticipate supply chain issues, move quickly to find alternative suppliers. If accounts receivable get close to 90 days, decide when to stop providing services. Not all businesses will succeed in this pandemic, and some may stop paying their bills.
Get Your Finances in Order
Selling a business is a massive undertaking. Due diligence is intense. The buyer is going to want to see proof for every claim you make. The more time you have to prepare, and the more expert support you have, the better. Now is the time to begin getting your financials in order, so that you’re ready to move quickly if a sales opportunity appears.
Now is the time to stay on top of your game, diligently guarding your company while anticipating the future. You might not be able to retire right away. The daily grind of running a business may feel exhausting. But you must maintain your focus. If your business loses value now, your future sale plans could suffer. Your most powerful marketing tool is a successful, well-run business, so focus on getting everything in order now, so you’re ready to move quickly on the other side of this crisis.