I have had a lot of people message me recently about what is happening in the market at the moment so I thought I would put up a quick post just in case you have been wondering the same thing.
Firstly I want to apologise for the radio silence in the Exit Group recently, like many others, when COVID hit we lost a lot of our business overnight. We went from the final quarter of the financial year looking like it was going to be our best quarter ever to a complete nightmare all in one weekend.
After a lot of scrambling and adapting our own business alongside the rest of the industry we are back on track and we are busier than we have been in many years. The combination of pivoting the business and then trying to keep up with huge demand has been my priority and this has not left me as much time as normal to be posting in the group. Hopefully we are all getting back to some sort of normality now so stay tuned.
As always please let us know what you need help with, myself and the GSE team as well as the community are always happy to help if we can.
The Current Market
Buyers
Over the last four weeks we have seen the number of inquiries on listings increase to higher levels than in the last three years. On several occasions recently we have generated more inquiries in a day than we did in a week prior to COVID.
There are a couple of things that I have put this down to. Firstly there has been some organic growth due to people finding themselves out of work, some with a payout that they are considering putting into a business.
There are also a lot of people coming into the market who simply don’t want to go back to the office and are keen to get into the industry.
Secondly we have mixed up our marketing a bit, for those of you that use FB and Google Ads you may have noticed a big drop in the cost per click for ads during Covid. Because less people were advertising this cost dropped significantly so we ramped up our ad spend and it seems to have paid off.
Buyers at the moment now seem more confident to take action and although there is some concern over a second wave this is not stopping them from making offers. If you have managed to negotiate a rent reduction during Covid then there is less room for objection as you can demonstrate that you have a supportive landlord. If you have continued to trade through COVID then this will also help you to overcome this objection.
Are buyers just looking for a bargain at the moment?
There are certainly people looking around to take advantage of other people’s misfortune after COVID. To be honest this is the case most of the time, you always get people looking for low cost businesses and some people just either don’t see value ot they just don’t want to pay for goodwill.
The good news is that this percentage of buyers has not really increased, we have movement in all price tiers right from the small starter business right up to the top end.
Sellers
Last week for the first time since we started the business we advertised for new listings. Pre Covid we were swamped with people looking to sell and now we are finding that people are reluctant to sell.
Most of the conversations that we are having with who people holding off from selling are around the current government assistance, increased sales and/or profit and the feeing that now is not a good time to be selling.
The listings that we have on the books at the moment are generating a lot of offers and we have had eight businesses go under offer in the last three weeks (two were rescued deals that fell over when COVID kicked in).
When are most people looking to sell?
Most of the people that we have spoken to about listing seem to be holding off until September, many want to capitalise on Job Keeper payments and short term rent reductions negotiated as part of the code of conduct.
The last quarter of the (calendar) year is generally when a lot of businesses come to the market and at this stage it looks like 2020 will be busier than normal
I hope that has given you a bit of perspective on the current market, I am interested to know your thoughts and experiences in what continues to be a very interesting time for the industry.
