2020 Year In Review - Reflections of a Business Broker

​2020 was a challenging year for everyone, and certainly a year of change and uncertainty for many businesses! In my discussions with business owners over the past year, I saw some business owners completely change the way they operate. Some had to re-think their exit strategies and some were able to capitalize on new opportunities, re-group and move forward. Despite all the changes, one thing is certain – small businesses are still the cornerstone of the North American economy and all of us rely on their services in our daily lives.
 
Looking back a year ago, things started with enthusiasm last January. With stabilizing economic conditions in Alberta, relatively low interest rates, and many retiring baby boomers, the start of the year was looking good for the sale of businesses. With the threat of COVID at the end of February and lockdowns in March, most potential and active business sale transactions came to a halt. A lot of buyers put on hold any acquisition plans and wanted to pause everything until the business environment stabilized under the pandemic conditions. With such unprecedented events, nobody knew what to expect and how severe the consequences may be. By the summer of 2020, as pandemic restrictions started to ease and businesses were able to make changes to their operations, as well as with even lower interest rates and government stimulus packages, buyers caught a “confidence wind” again. Buyers started to pay close attention to the severity of the impact of the pandemic on the business, as well as the degree of financial recovery. Optimism in the market improved in the second half of the year, and both buyers and sellers returned to the negotiation tables, albeit with more caution.
 
During the past year, there has been growing demand for attractive businesses, driven not only by the reduction of the number of pandemic-proof businesses, but also by an increasing number of buyers. Some folks who historically were happy to work for an employer because of perceived stability have realized that employment is not as stable and risk-free as it seemed, and have now decided to explore entrepreneurial opportunities. Many qualified individuals who lost their employment due to COVID lockdowns have decided to get into business on their own and many are interested in purchasing an existing business instead of starting a new one from scratch.
 
Some businesses and industries have exhibited a particular resilience to the pandemic. Businesses that have survived the lockdowns with minimal or no negative impact, as well as those that have been able to bounce back quickly and grow, have become very desirable targets for acquisition. Businesses with relatively stable revenues and low overheads have become extremely attractive. These pandemic-proof businesses will continue to be in demand in the future. We have potential buyers who are very interested in these types of businesses.  If you, or someone you know, have been thinking of selling your businesses and your business has some of these attributes, this is an excellent time to hit the market!