Business buyers can expect a surge in trade once the Covid-19 pandemic has passed, but it is important to make careful plans to ensure a business can cope with this new demand. Although purchasing an established, profitable business provides a new owner with a solid foundation for growth, in these circumstances attention should be given to certain business areas, including potential funding and technology.
Covid-19 has created unparalleled challenges for many businesses, but when the economy reopens fully, it is expected that a surge in consumer activity will provide the economic boost the country needs.
Clearly, this is an excellent time to buy a business and take advantage of the expected boom in trade. But how can business buyers prepare themselves and their new businesses, so that they flourish post-Covid-19?
Consider potential funding sources
New business owners can support periods of growth by taking advantage of alternative methods of funding. There may be a specific type of finance that would suit their business - invoice finance, for example, that is based on the business’ sales ledger.
This form of finance provides regular inputs of working capital throughout the month, and can help to fund areas such as additional staff, materials, or supplies, that are needed during a surge in post-Covid-19 trade.
Other forms of alternative finance include asset-based funding and merchant cash advances. Alternative funding is typically more flexible and quicker to access than applying for a business bank loan.
Reinforce technological systems
An audit of the business’ technological infrastructure may reveal areas where existing systems could be made more robust with the introduction of new or additional software. As the business deals with a surge in trade, management of stock may need to be tighter and more efficient to generate maximum profits, for example.
Payroll may be another area of focus for business purchasers, particularly if the workforce needs to be expanded to deal with additional trade. Robust accounting software can also provide crucial information on operations day-to-day.
Even if the former business owner used new technologies and effective procedures, a post-pandemic surge in trade could create additional demands on the system that were not present beforehand.
Bolster supply chains
The economic effects of the coronavirus pandemic have been devastating for many businesses, and it is a good idea to scrutinise the financial health of all companies in the supply chain of a newly purchased business.
It only requires one business in the chain to close down, and the smooth flow of orders and fulfilment can be damaged beyond repair. So by checking the health of the supply chain, and actively searching for suitable replacements in the event that a business fails, buyers are protecting their investment and ensuring the new venture does not fall at the first hurdle.
These are unprecedented times in which we are living and working. Being aware of potential roadblocks to success, whilst proactively pursuing business growth, offers the best outcome for business buyers until the economy recovers to pre-pandemic levels.
Actively seek professional assistance
Proactively seeking expert assistance ensures business buyers gain access to solutions and ideas tailored to their particular business and industry. Business sales brokers, qualified accountants, and legal experts, can all help in ensuring a business is well prepared for a surge in post-Covid-19 trade.
Our team of experts at Selling My Business have a combined 60+ years of experience, and can help business buyers make the necessary preparations to deal with a boom in trade following coronavirus.
We can provide bespoke advice based on the type of business purchased, and identify any specific issues that might arise as trade picks up. We work from offices around the country – please get in touch to arrange a free, same-day consultation.