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Documentation is Key During This Time

There has been a meme for our industry making its rounds on Twitter that says instead of EBITDA, in the coming years we’ll be referring to EBITDAC… “earnings before interest, tax, depreciation, amortization coronavirus.”

As the global pandemic continues to impact businesses and individuals across the globe, one question we’ve heard quite often from potential buyers is, “And how are they handling the COVID-19 situation?”

Many regular activities have seen an upheaval, and your company’s coronavirus response will likely be discussed for some time – typically, business buyers (and their associated lending institutions) review at minimum of three years’ worth of financials when making their decisions.

We suggest taking note of your business’s operations so you will be able to accurately respond. Here are some questions to ask yourself now and in the coming months as the economy recovers:

  1. What did your financials look like in January through March of 2019, and how does that compare to 2020? (Running a Q1 year-over-year report may be helpful.)

  2. How many staff/payroll hours do you typically run in a month, and how does that compare to April of 2020?

  3. Did your business get offered a PPP loan? Did you accept it?

  4. Of your employees: how would you classify each staff member’s utilization rate before the social distancing restrictions? How would you classify it at the end of March 2020? How does that compare to the end of April 2020?

  5. Did you reduce your operating hours? How/when did you reopen?

As always, if a sale is on the horizon, we recommend contacting us for a complimentary valuation for an accurate market-based measure of the current value of your company.

Stay safe, and we look forward to closing deals with a handshake (or an elbow bump!) again soon.

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The Firm is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.