Around the Web: A Week in Summary
A recent article from Divestopedia entitled “Cash Forecast Excel Tool: In Tough Times, Cash is King” provides actionable advice that business owners can use to navigate the current financial challenges.
The central theme for businesses trying to stay afloat during times like these is simple: be conservative. Most business owners’ basic instinct to save every dollar they can and narrow their focuses on continuing to turn a profit is reasonable. In this article is a checklist of tips for surviving the downturn, a tool to calculate weekly cash flow, and a list of questions business owners can utilize to perform a cash analysis.
A recent article from Smart Business Dealmakers entitled “Coronavirus Has Disrupted, But Not Extinguished, M&A Options” discusses the benefits of the current market conditions for businesses, buyers and owners considering selling.
It is true that the current disruption to the economy is not ideal. Given the circumstances, it may seem as though negative consequences are all there is to look forward to. However, the situation at hand does present opportunities for the M&A market. For owners, buyers and sellers alike, here are some things to look forward to:
- Reduced Risk – For business owners looking to remain in business, now is an opportune time to consider bringing in a minority investor in order to grow the business or to reduce your personal risk as well as the risks for shareholders who may be concerned about their financial safety during a time like this.
- Buying a Company – During an economic downturn, there is also a leveling out of pricing. There is likely to be an increase in the number of businesses available for purchase, and with that will likely be a decrease in the average price of each company.
- Selling – As an owner, there are many reasons to consider the sale of your business right now. Whether it’s to avoid the difficulties that lie ahead or to put cash back in your pocket for security, there are plenty of investment firms and buyers on the lookout for new opportunities. While prices may decrease, the market will see an increased use of structuring tools such as earn-outs that may be enticing for some owners.
A recent article from Axial entitled “PE Business Development Post-Coronavirus – COVID-19 Virtual Roundtable” provides the audio files and show notes from a discussion between eleven M&A professionals regarding the effects of COVID-19 on the lower middle market.
During their discussion, these experts discuss important questions such as:
- How is the business development ecosystem evolving in this time of upheaval?
- Are firms pressing pause on sourcing?
- Will investors change their mandates in response to the pandemic?
- How is time being spent differently right now?
- How have strategic acquisitions been affected?
For insight into these questions and more, access the recordings and the main takeaways from the discussion, as well as links to previous COVID-19 Virtual Roundtables.