The COVID-19 pandemic affected the majority of economies all over the world. Buying a business when the purchasing power is down may seem like a counterproductive idea. In reality, a smart approach to acquiring a business can help you capitalize on the economic downturn.
Several highly successful businesses launched during economic crises. One of them is General Motors. It was created in 1908 when the United States was still feeling the aftermath of the 1907 financial crisis. Another example is Burger King. It started working back in 1953 during a recession.
Starting a business during a crisis can be beneficial. Buying one could be the smartest decision you ever make.
Despite the pandemic, thousands of new businesses are appearing. While 90% of all startups fail, buying an existing business could be a profitable endeavor. Here is why.
1. Less Competition
During a world crisis, many companies have to reinvent themselves or file for bankruptcy. Hundreds of thousands of businesses closed their doors during the pandemic, and the trend isn’t likely to stop any time soon.
When buying a business during a crisis, you don’t just have fewer parties competing for the company. You can take advantage of an excellent low-competition environment to promote the new business and help it succeed.
According to Business Broker from Orlando, with little competition in the marketplace, businesses that manage to stay afloat are stealing market share and becoming industry leaders.
2. Bigger Talent Pool
During a world crisis, people start losing jobs. With companies closing down, layoffs are unavoidable. It’s an excellent opportunity for other companies to find top talent. When the economy is thriving, the competition for talent is fierce. High turnover rates force companies to focus on retention and spend millions of dollars trying to keep top talent in its place.
While people are losing their jobs during the crisis, a new business owner can have an easier time hiring the perfect workforce. A world crisis presents impressive opportunities for top talent acquisition without breaking the bank.
3. Low Interest Rates
In 2020, the Federal Reserve plans to keep the benchmark interest rate near zero. Before the pandemic struck, it was up to 1.25%. If you want to get financing for buying a business, today is the best time to do it.
A low interest rate can make it easier to purchase a business than it was before the COVID-19 era. Once the pandemic ends, the conditions are likely to worsen. If you buy a business right now, by the time the virus is gone, you can already have a highly successful company.
4. Perfect Timing
During the world crisis, many business owners decide to sell their companies. It’s possible to get an excellent deal on the business of your dreams without waiting for years for an opportunity to come up.
You can take advantage of a bargain price and purchase a suitable company without facing fierce competition. As soon as the crisis is over and things start going back to normal, the opportunity may not present itself anymore.
5. Simpler Marketing
The key to success in any business is a smart approach to marketing. With so many marketing channels and tools available to a business owner today, it’s becoming harder and harder to cut through the noise.
During a crisis, the number of companies that manage to stay afloat is low. It’s an excellent opportunity to market your company and become an industry leader. If you buy a business during a crisis and invest money in marketing, it can have a tremendously high ROI (Return on Investment).
While it may seem like an economic crisis could be the worst time to buy a business, it’s an opportunity you may not want to miss. With many competitors out of the picture and top talent out of jobs, you can turn a less-than-perfect company into a highly successful business.
If you have time, energy, and resources to buy a company (at a bargain price) during a crisis, it’s worth a shot. Think of the crisis as an opportunity to build a highly successful business and outrunning the weakened competition.