as new zealand moves forward through the various stages of the covid 19 pandemic we are seeing
some remarkable and previously unheard of trends emerging in the business sales marketplaces
business owners more than ever will need specialized advice on how to divest their
business and what is the market with new and unique characteristics
now on the buyers side groups and individuals with access to capital and with the courage to invest
will see once in a lifetime opportunities so what are the post covid 19 business sale trends
and what should you expect the market to look like this year
here are some trends we are seeing already we expect these trends to grow and magnify in the
short to medium term so number one newly employed people looking to buy businesses
to replace their lost income existing businesses looking for equity partners rather than bank debt
the new tax legislation has opened a viable market for companies that have retained
losses and associated tax credits experienced and cashed up buyers especially returning expat
new zealanders have become more active in looking for businesses now currently we are seeing newly
unemployed people looking at buying a business to replace the income they have recently lost
now effectively these people are looking to buy themselves an income rather than competing in a
tight job market now this is causing a spike in demand for that owner-operated business with a
value between maybe 100 and 500k and returning a six-figure salary to the owner there are also some
landlords in the hospitality and retail sector that are becoming business owners in the short
term as tenants default on rental obligations and cannot continue to trade now these scenarios will
provide great opportunities for savvy investors to buy the assets of these businesses for a
discounted value and will be able to negotiate a favorable lease terms and as a result will own
a business at once in a lifetime entry costs so the businesses that have experienced the material
hit in cash flow and maybe profitability during covid 19 rather than increasing bank debt which is
going to increase their financial problems in the medium and long term they're looking for partners
and investors to buy a shareholding in their company now post the new tax legislations any
businesses with tax losses are now a desirable business to existing businesses we've had some
inquiries looking for companies who have retained losses and attached tax credits now if you own
a company that has retained losses you have an asset with value which was previously not the case
there are several conditions that come with this type of transaction but it has opened the
door for a new type of business sale that can provide value to both the loss making company
and the company purchasing the retained losses and tax credits now the current business market will
provide opportunity for groups and individuals who have access to capital but more importantly have
the courage to invest those investors who can take a medium view on investments and have the ability
to withstand short-term lower returns will be in a position to access exceptional business
opportunity interest rates are at historic lows and this creates the perfect storm for
anyone wanting to purchase a business the majority of people purchasing a business in
this current market are walking away from the transaction feeling as though they're getting
great value they can make the numbers work and easily reach the appropriate investment milestones
let me know in the comments below what you see as the post covid market and how you'll react to it
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