3 Reasons Why Selling During COVID Makes Sense

By Jessica Borowy January 19, 2021 COVID-19, Exit Strategy

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For many reasons, the midst of a pandemic might not seem like prime time for selling all or part of your business. Uncertainty is high, and COVID-related slowdowns may have devalued companies from what they would have been worth to a buyer in 2019. So it’s no surprise that a lot of owners assume they need to get things back to pre-pandemic levels to maximize a potential sale. Plus, many are coming off their best year in 2019 and don't want to sell in a down market. Worse, not only are many owners unsure about selling, they’re also hesitant to make any significant investments in their businesses—with the persistent uncertainty in the current market, they see it as too much of a risk.

However, selling or bringing on an investment partner right now could be the right move precisely because there is so much uncertainty in the market. In fact, an influx of cash to make key investments—along with the deep operational and financial expertise a private equity firm like ORG offers—could be exactly what you need to take your company to the next level, without taking on all the risk yourself.

Here are three reasons why you should consider adding an investment partner right now:

1. The bad times won’t last forever.

Things will get better. Vaccines are being introduced, so if you want to get ahead of the competition, now is the time. But even if COVID lasts longer than we anticipate, businesses are still going to see an upward turn. The last nine months have taught us all a lot about operating in this new reality. Plus, it has given everyone time to pivot, adapt and find new ways to operate successfully, despite the challenges.

2. You can still get a fair price.

Yes, COVID has impacted your company’s bottom line. But ORG recognizes that the pandemic is a unique external event, and not a reflection of your company’s performance in normal times. In valuing businesses right now, we normalize for COVID. Essentially, we’re setting aside Q2 2020 and focusing on the recovery a company has seen in Q3 and Q4. Positive trends, a healthy growth pattern and incremental gains after the initial shutdown period are what ORG wants to see.

“Honestly, we’re not as concerned about COVID as you might think,” says Jessica Borowy, Vice President, ORG. “Many businesses were down 20 to 50% or more, but have started to get back to where they were at the end of 2019. As long as we see upward progress, we are in a good place. Not only that, we will work with you to come up with a creative structure that accomplishes your goals and meet your expectations. So far, we’ve been able to make four investments during COVID—so we are still able to meet owners’ goals, both personal and financial.”

Additionally, while ORG wants to see sales volumes trending up, our main focus is on a company’s strategic vision for the future. Do you have a strategic plan post-COVID? How are you adapting to better serve your customers? Are you taking advantage of new opportunities that didn’t exist before? If you have a solid vision, but just lack resources to execute, that's exactly when ORG can be most helpful.

3. It's an opportunity for growth and a chance to get ahead of the competition.

Let’s be honest, there’s more to gain when you’re starting in a downturn. When everyone is struggling, getting a leg up with a strategic investment/partnership enables to you get bigger, better and more innovative—faster.

Most notably, you can use an investment to acquire competitors who might be struggling. Accretive acquisitions can make a lot of sense after difficult periods and times like these are ripe for a certain amount of aggressiveness. Buying competitors can also add instant value by helping the business scale quickly and optimize operations for both companies. Of course, one must be prudent with acquisitions to ensure there is an alignment of cultures and a true strategic fit—growing for growth’s sake is not wise.

Another way to accelerate growth is through modernization or infrastructure improvements. Being able to put a significant investment into capex improvements is another path to growth. COVID has greatly accelerated technology adoption for many industries, along with the ways we interact with clients. Being forced into a fully digital world has created much higher expectations on that front. An influx of cash from an investment partner like ORG lets you hire the people you need and invest in the systems that will move you to the front of the pack.

All in all, businesses are using this time to change the way they go to market, communicate with customers and rethink their overall value propositions. A capital partner like ORG can help you optimize this time to elevate your firm—so we highly recommend you start tackling those long-term goals now.

It’s a great time to start the conversation with ORG.

We fully expect 2021 to be drastically different, and hopefully, much better than 2020. But if you wait until the pandemic is officially over, it may be too late: everyone else will have already gotten started too. By starting now, you can give yourself a real competitive edge—one that could drive you to the forefront of your industry.

If your business could benefit from outside expertise to help you grow and take advantage of these unique market opportunities, don't hesitate just because your numbers are down. ORG can help you capitalize on those opportunities—and get you back to a place where you won’t just match your pre-COVID success, but will hopefully exceed it by leaps and bounds.

To learn more about why ORG might be the partner your business needs to grow and thrive, watch the video below or contact us today at inquiries@orgroup.com