The COVID-19 pandemic has created a significant economic downturn. Economic downturns create significant opportunities for business owners who have the wherewithal to take advantage.
If you’ve got cash—or the availability of cash—here are three investments to consider right now. This information appears in The Hartford Small Biz Ahead blog.
Real estate
When people say it’s all about location, location, location, they’re absolutely right. The strength of the property market really does depend on where the market is, what industries are located nearby and the social and financial demographics of the local population. But, regardless of location, the downturn has and will continue to affect many commercial properties nationwide. Why?
More businesses have discovered that working from home actually works and, over the next few years, will also realize that they have too much office space. If your business is working remotely, Peak Advisers has tools and ideas about how to make things run more efficiently for you. See some of them here.
Additionally, think about the businesses in these industries:
Retailers suffering from huge losses of traffic in to their locations
Movie theaters have been closed for months
Event venues not able to host large gatherings
Commercial property markets are challenged in big ways. This might have been the last straw for many of the businesses mentioned above.
Article author Gene Marks reports property values will decline in many areas, and that presents an opportunity if you’re looking for warehouse or production space. Consult a commercial real estate broker and plot your strategy.
Inventory and equipment
Some surveys predict hundreds of thousands of small businesses will go out of business because of the COVID-19 pandemic. This isn’t good news for those small business owners or for the economy, but it does present opportunities for businesses looking to snap up equipment and inventory.
If you’re in the market for that special machine—a used printing press, a forklift with low miles—then you should start looking now. Just Google “used equipment for sale near me” or visit online sites like MachineryTrader.com to see what deals are available.
Mergers and Acquisitions
According to BizBuySell, a marketplace for businesses looking to buy and sell, there is now a “lifetime opportunity” for business acquisitions, article author Gene Marks reports. Many baby boomers have already been looking to get out of the game and retire prior to the pandemic and now, after struggling through the ordeal, want out more than ever. Other businesses—struggling for any number of reasons—may have also been pushed over the edge by the economic downturn.
This presents a great opportunity for any other business owner looking to expand or for an aspiring entrepreneur with a little capital who is looking to start his or her own company. Talk to a business broker, go to BizBuySell or ask around in your local trade association.
Marks has one final piece of advice: There is a great financing deal available for small businesses. Included in the CARES Act is a provision that will forgive the first six months of principal and interest payments on any new Small Business Administration Section 7(a) loan closed before September 27, 2020. The loan proceeds can be used for real estate, business acquisitions, assets and even working capital.
For more information on SBA Section 7(a) loans, use this link.