As we move closer to the “new normal” for business operations in the aftermath of COVID-19, there will be challenges that face both owners and their service providers as to how they adjust their thinking both short and long term. Some of these questions involve the following:
- Should our employees continue to work remotely or come back into the office?
- Will the effects on revenue, good or bad, continue, or was this a short-term blip that will disappear in the next year or so?
- If I want to sell or buy a business in this changing marketplace, what should I consider differently than before?
- How can I take advantage of new opportunities created out of the changing business model?
Regardless of what opportunities or challenges you face today, it makes sense to consider an updated business appraisal as part of the next steps in your ongoing process. It may be that as a potential buyer of a business affected by the pandemic, you see an opportunity to purchase at a distressed value with the plan to reorganize and create efficiencies that will turn the company around in the near future.
On the flip side, if you are compelled to sell your company in the next year, you may need to consider discounting the value of the business and provide seller-assisted financing as part of the negotiation to incentivize a potential purchaser.
Much of the decision-making needs to be weighed against how short or long term your timeline is with taking these next steps. If you have the time to wait out the aftereffects in the hope of normalization, that might make more sense than determining an immediate course of action with many industries still impacted by the pandemic. Not every business owner has this luxury, however, and the need to make sound decisions with several unknowns still out there may require the assistance and guidance of objective third parties that can provide additional perspective on the state of your company.
From a valuation perspective, your research should lead you to engage with a certified business appraiser, with the expertise and experience to determine your company’s current value. These appraisers may have differing opinions as to the factors that will affect value the most, based on their understanding of your financial data and the marketplace itself, so ensure you have preliminary discussions with them before you decide the best fit.
Speak with your accountant as well, who may be able to provide insights into the best approach to working with an appraiser. In summary, the challenges ahead may be many, so try to gather the support you need to make the most informed decisions possible as you navigate the “new normal”.