Indeed, while we are frequently asked to describe the impact on business transfer activity "in these unusual times," the answer warrants a nuanced approach.
One does not need to be an economist to understand that this new crisis is not good news. Economic actors across the board have been chilled. Buyers and bankers are calling into question valuations built on historical figures, yet these represent the only reliable data available for SMEs.
How will business evolve during normalized times, post-crisis? Will profitability be there? Consequently, negotiations can become tense, as sellers are unwilling to sell their companies at a discount, viewing the current situation as exceptional. Some sellers choose to postpone the sale to await better days. Others accept having a portion of the price made contingent. Those operating in the hardest-hit sectors are in survival mode anyway, which is obviously not an opportune moment to look for a buyer.
Fresh Blood and Diversified Financing Sources
However, the current crisis also brings its share of advantages. We have never seen such high demand from individual prospective buyers. Furthermore, their profile is generally of outstanding quality. These future entrepreneurs, who are ready to commit to a demanding path for many years, bring fresh blood to the market. The enthusiasm and commitment of these buyers spark a positive momentum that commands respect. The company can make a fresh start in a new direction, combining past strengths with the buyer's new initiatives.
The multiplication of financing sources, alongside their attractive cost driven by abundant market liquidity, represents another opportunity worth highlighting. Those who dare to take entrepreneurial risks today generate significant value: by pairing debt repayment with earnings growth, the value creation will be exponential—much like certain viruses...
Persistent Obstacles
Despite this undeniable momentum, numerous obstacles to business transfers remain. For instance, the confidentiality of the process—while essential to fostering calm discussions—can become paralyzing when carried to excess. Sellers must be reassured that their file will be handled with care and anonymity, up to a certain point, in order to effectively reach the right candidates.
Other hurdles are psychological in nature. Far too often, SME owners still practice an ostrich strategy by failing to outline a long-term plan. To hear them tell it, the business cannot operate without them, meaning they cannot step down. On the contrary, sellers must learn to let go, project themselves into other endeavors, and allow the company to head in new directions.
In our view, however, the main hurdle remains matchmaking: finding that rare gem, the ideal buyer for each specific business. Replacing a managing director—who is often the captain and the multi-tasker around whom the entire business was built—is no easy task. The buyer must combine technical and managerial skills with the interpersonal qualities needed to reassure employees and other stakeholders.
It is precisely during such delicate periods that choosing the right business transfer advisor becomes crucial. The advisor's role goes beyond simply finding the right candidate; it involves building trust between the parties. By providing guidance throughout every step of a potentially lengthy process, the advisor creates a structured and reassuring framework for both seller and buyer. Let us support all initiatives that foster or preserve economic activity!
