What to be Aware of When Buying or Selling a Business in the Current Market

What Should You be Aware of When Buying or Selling a Business in the Current Market?

The current economic climate is an interesting one, and it has a significant impact on businesses and their buyers. As a business broker in Brisbane, it is important to be aware of the current market trends and conditions to provide the best advice to your clients. Factors like inflation and interest rates can have a significant impact on businesses, and it is important to be aware of these factors when buying or selling a business. Understanding industry trends and changes can also help businesses remain competitive. When working with buyers and sellers, it is important to understand their goals and objectives and to provide targeted advice based on these goals. With the right knowledge and expertise, business brokers can help their clients navigate the current economic climate and achieve their goals.

Cristian Marcu, Principal of ELDAD Property Group interviewed Adam Mantell from Rudd Mantell Accountants to talk about the current market and what to be aware of if you are thinking about selling your business.

Inflation

One of the most significant factors to consider is inflation. Inflation refers to the increase in the prices of goods and services over time. When inflation is high, it can have a significant impact on businesses and their profitability. For example, if the cost of raw materials or inventory increases due to inflation, it can make it more expensive for businesses to produce and sell their products. This can lead to a decrease in profits, which can be problematic for businesses that are trying to sell.

Interest Rates

Another factor to consider is interest rates. Interest rates refer to the cost of borrowing money. When interest rates are high, it can make it more expensive for businesses to borrow money for things like expansion or investment. This can limit the ability of businesses to grow and can also impact their profitability.

COVID-19

The COVID-19 pandemic has had a significant impact on the economy, and it is important for businesses and their buyers to be aware of this impact. The government provided a significant amount of funding to support businesses during the pandemic. While this funding was helpful for businesses, it also resulted in a significant increase in government debt. This debt will need to be repaid at some point, which could impact the economy in the long term.

Past Business Performance

When considering buying or selling a business, it is important to be aware of past performance. While past performance can be a useful indicator of how a business will perform in the future, it is important to remember that it is not always reliable. For example, a business that performed well in the past may struggle in the current economic climate due to factors like inflation or interest rates.

Industry Trends

As a business broker, it is important to be aware of industry trends and changes that may impact the businesses you are working with. For example, the rise of e-commerce has had a significant impact on traditional brick-and-mortar businesses. It is important to be aware of these trends and to help businesses adapt to these changes to remain competitive.

Goals and Objectives

When working with buyers, it is important to understand their goals and objectives. Some buyers may be looking to invest in a business for the long term, while others may be looking for a short-term investment. Understanding these goals can help you identify businesses that are a good fit for the buyer and can also help you provide more targeted advice.

Preparation for Sale

When working with sellers, it is important to help them prepare their businesses for sale. This may involve identifying areas where the business could be improved, such as reducing costs or improving profitability. It may also involve helping the seller understand the current market conditions and how these conditions may impact the sale of their business.

Don't forget to do your due diligence and make sure you have the best team around you. You can find out more in our article on Due Diligence which is part of our series on Buying and Selling Businesses.  

You may also like our video series on What to Look for in the Current Market When Buying or Selling a Business: https://youtu.be/YqvzCBa9loY

If you are considering selling your business, contact Cristian from ELDAD Property Group for a confidential discussion on how to best position your business for sale.