One of the first things I always tell business owners who are getting ready to sell is that the process typically takes more than 6 months. What I never had to talk about before March 2020 was the impact a global pandemic will have when selling a business.
In summer 2019, I began working with a retail store owner who specialized in women’s fashion and accessories. This was an established business with a strong, consistent revenue history and plenty of growth opportunities. Before the pandemic, the business listing had received over 40 inquiries. In March 2020, the world changed and businesses had to quickly figure out how to adapt. That process alone was stressful enough for many but it added another layer of complexity for business owners who were trying to sell their business. As the pandemic began having significant impacts on retail businesses, the owner and I strategized and found ways to successfully grow and sell the business.
The business owner quickly realized that the retail landscape was changing and if the business was to sell, it needed to change too. Since brick and mortar retail was significantly impacted by public health measures, the business owner pivoted to online sales. She created an online store and let people know it was open and ready for orders. The business already had an established email list of over 3000 customers that had proven itself to be one of their most effective marketing tools. The list had a low unsubscribe rate. In pre-pandemic times, the first morning after an email campaign often saw a lineup at the front door of the store. Using a combined online advertising strategy of email campaigns and social media posts, the business owner was able to let customers know how they could continue to shop at one of their favourite stores. The business optimized the online shopping experience and delivery options for their customers while finding ways to manage their cash flow and keep the business viable.
Growing and selling a business during unprecedented times came with many challenges. In addition to lost revenue from the physical retail location, there were other barriers to success that were not typical of a business for sale transaction. All the involved parties were forced to move their communication online via email and Zoom meetings. While these tools can help the process to move forward, there are times when a face-to-face meeting can be far more productive and efficient. Verbal and non-verbal cues, as well as nuances in communication, are often lost when working virtually. This can lead to misunderstandings and miscommunications. We had to double our communication efforts to ensure the process continued along a forward trajectory.
As the transaction progressed at arm’s length due to the physical restrictions in place, it was sometimes difficult to keep other parties on track with timely responses to emails and overall communication. This required constant follow-up to meet important target dates for the buyer and seller.
The two biggest lessons learned during this transaction were about being prepared and learning to adapt.
The business was already well prepared for a new owner when it was first listed. Documentation, records, and financial statements were accurate and up to date. Being prepared gave the owner two advantages. First, it created a level of transparency that inspired confidence and trust from the buyer. Second, it freed up the owner to focus on continuing to run and grow the business throughout the entire time it was on the market. Ultimately, this focus resulted in new growth and a successful sale.
For all parties involved, a willingness to adapt catapulted the transaction to a successful close. The original business owner was able to quickly pivot the business to include online sales, which increased overall profits and proved the viability of the business model. Other parties adapted to different forms of communication and came to the table prepared to move forward in a safe and timely manner.
Running, growing, and selling a business during a pandemic can feel tough but we know it is possible. Being prepared to adjust to things like restrictions, ways of doing business, and how we communicate is an important first step. Also, having a certified business intermediary on your team can help keep the transaction moving forward even when things seem impossible. We know the business landscape will continue to look a little different in 2021; regardless, you can still enjoy a successful business for sale transaction! If you are thinking of selling your business this year, please give me a call so we can talk about your goals.