2021 is a unique year in terms of being both a buyers and sellers market. That is why I put together this list of 8 reasons why it is the best year to sell or buy a business.
1) So Long Covid: The Covid-19 pandemic is expected to subside by late summer as the vaccine is distributed. This instills higher confidence for business Buyers in 2021. Buyers and Lenders/Appraisers are increasingly ignoring 2020 in their valuations so long as the business is back to pre-pandemic revenue and profits. Owners who survived the recession in 2008, and the pandemic in 2020 are ready to cash out in 2021.
2) Lower Volatility: The elections have been decided, thus reducing the risk that Buyer’s perceive thanks to a more “predictable” political and business climate.
3) Great ROI: Investors know that buying a small business has a greater return than most other investments now, and it’s very cheap to borrow funds and leverage their money.
4) Low Taxes, For Now: Taxes are expected to rise in 2022 on personal income, business profits, and the proceeds of business sales, thus making 2021 the best time for Sellers to cash out if they are anticipating retirement in the next 3-5 years.
5) Active Buyers: Buyers are traditionally most active during the first quarter of the year. There also are a large number of new buyers who have recently departed the ‘corporate’ world.
6) Seller’s Market: There is a very low inventory of quality businesses for sale. Those that are listed are receiving considerable Buyer attention, short time on market, and often list price.
7) Sell High!: Surviving businesses are likely to see higher revenues in 2021 as consumers release their pent up demand, spending their money on the now-fewer goods & services providers. If your business is unaffected by the pandemic, or is roaring back afterward, that’s exactly what Buyers are seeking!
8) Buyers get Fees and 6 Months Payments – FREE! with an SBA 7(a) Loan: The CARES Act has been extended, which gives existing and new SBA 7(a) borrowers FREE FEES and SIX MONTHS of FREE PAYMENTS. This is an unprecedented and powerful motivator for Buyers to complete a business acquisition now!
