Buying an Essential Business During the Pandemic, is it the Right Move?

While countless businesses have felt negative effects from closures or reduced services as a result of the COVID-19 pandemic, there are some that are thriving. Some businesses have pivoted to meet changing needs, some have gone online and some are increasing products or services because they are considered “essential.”

For strategic buyers, the pandemic has increased interest in buying a business that’s performing well or business that performed well prior to closures and who have developed plans for how to move forward for the remainder of 2020.   Even though some sectors will face short-medium term economic challenges i.e.: the travel and hospitality sector, some industry experts believe the long-term impact of coronavirus on other business sectors may be minimal. The rate of infections will eventually flatten, a vaccine will be created, and businesses will recover. Economic fundamentals are still very strong and, once people are back to work, the pent-up demand will drive a serious rebound.

Businesses deemed essential are doing well in this climate as they are in high demand for their services. For instance, the temporary restrictions on imports from other countries are making businesses source locally, driving up demand. The longer reliance for locally sourced goods is also driving up the revenue for the transport industry.

As long as oil prices are falling, distribution will become cheaper, thereby increasing profit margins. Software and IT businesses, professional services, retailers & online business will all see an uptick as they all benefit the public during the pandemic.

Here are some examples of businesses currently hiring additional workers to keep up with the demand:

1 ) As Americans stock up on household basics, Dollar General announced that they’ll hire up to 50,000 additional workers by the end of April for their 16,000 stores nationwide.

2) Online grocery delivery company Instacart announced plans to add three hundred thousand full-service shoppers over the next three months for grocery delivery and pickup

3) With so many Americans now working remotely from home, video conferencing companies are taking off. For example – while the stock market has dropped ten thousand points since February, ‘Zoom’ has seen its stock rise from $70 a share in late January up to $160 a share in March.

To keep the economy going, the government is slashing interest rates and banks are flooding the markets making capital more accessible. In addition, residential and commercial property refinancing is expected to climb.

All this makes borrowing to acquire a lucrative business easier and post-deal cash flows will increase due to cheaper debt. The Small Business Administration (SBA) is doing all they can to keep the economy strong, with hopes that various loan offerings and proposals may make a strategic purchase an appealing option, even in these uncertain times.

If you are interested in buying a business in the Roanoke or Lynchburg, Virginia area, here are the “Essential Businesses” we have FOR SALE:

1. Steel Fabrication and Manufacturing –  Virginia

Asking Price: $4,150,000
Gross Revenue: $6,037,511
Cash Flow: $720,532

This is a well-established Steel Fabrication and Manufacturing business, delivering high quality fabricated steel products to residential, commercial, industrial and mining customers for over 25 years

For sale

2. Furniture Restoration and Refinishing – Virginia

Asking Price: $1,050,000
Gross Revenue: $1,060,996
Cash Flow: $332,743

A total turn-key on-site furniture refinishing, re-upholstery, FF&E installation/liquidation and furniture modification business for sale with expert services offered in all 50 states

Now for sale

 

3. Architectural Precast Concrete-Virginia

Asking Price: $425,000
Gross Revenue: $436,885
Cash Flow: $40,933

An established 34-year quality precast concrete supplier offers the customer Architectural Precast material for the commercial construction market

Concrete business for sale

 

4. Fencing company with over 15 years experience – Roanoke, VA

Asking Price: $375,000
Gross Revenue: $598,511
Cash Flow: $148,874

Extremely profitable and successful Farm and residential fencing company serving the counties of Bedford, Roanoke, Franklin, Botetourt, and Campbell in Southwest Virginia. This business provides a stellar reputation with 5-star reviews and quality built fencing; as well as garden structures and run-in sheds.

For sale

 

5. Plumbing, Heating, HVAC company for sale – Southwest, VA

Asking Price: $299,000
Gross Revenue: $1,306,000
Cash Flow: $87,905

60 + YEARS IN SERVICE Well established commercial plumbing and HVAC contractor that has been family-owned for many decades (60 + years) and provided reliable service for generations of customers throughout Southwest Virginia. This company can service large industrial and apartment complexes as they have specialized equipment that is needed for large commercial jobs.

Plumbing, heating, HVAC company for sale

 

6. FedEx delivery routes – Roanoke, VA

Asking Price: $275,000
Gross Revenue: $497,115
Cash Flow: $92,307

Includes Home Delivery & Ground, 100% overlapped routes, and has already made the conversion to ISP – August 2019. Sale includes 6 trucks (included in purchase price) with free and clear titles. Well established routes with plenty of growth opportunities.

Fedex delivery routes for sale

 

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