Is now a good time to invest in a business?
I have spoken a lot in recent weeks about the struggles facing small businesses and the challenges that the current economic climate is presenting for business owners.
But could now actually turn out to be the perfect time to look at buying or investing in a business?
There is no doubt that it would be difficult to start up a new business right now, especially if you are unable to physically meet customers or investors.
What we also know is that roughly 20% of new businesses fail in the first year, and 45% in the second year.
That is one of the main reasons that people buy or invest in established businesses, rather than starting one, is that they have existing infrastructure and ongoing cashflow.
You might actually find that an approach to a small business in your area that might be looking for investors, or is happy to have a conversation, could turn out to be a worthwhile exercise.
You can ask your questions about employees, or the lease, or the state of the business and whether they are thinking about selling. And It may only be small amounts like $2000 or $5000, but many businesses will be looking for that sort of investment at this time.
Even if you have never previously thought about investing in or buying an established business, these are unprecedented times and almost anything is worth considering.
There will be opportunities out there to possibly get something a little bit cheaper than you otherwise may have 12 or 18 months ago, and as with so much in business, timing is everything.
The issue at the moment of course is liquidity, with not many buyers or sellers in the market, but the opportunity is there right now to do your homework on some different businesses that you might be interested in, who may be looking for investors.
Whether it’s a franchise or a small business, it is important to keep an open mind and explore all your options. It could just turn into a life-changing step.