Bridging the Way BayState Business Brokers blog

Create Notes Now of How Covid-19 has Affected Your Business.

by | Jul 7, 2020

Many businesses are being affected by the Covid-19 shutdowns and their effect on business results. Because of this, it is likely that business buyers and lenders will consider this in valuing your business and approving a loan for a business buyer when you sell your business. But how it is considered will depend on your particular situation. Businesses in the same industry are being affected differently. It is likely that business buyers and lenders will want to dig deeper into what your business did during this time and how it was affected. Now is the time to create notes, or a journal, of what is occurring. Here are some suggestions on what to include in the notes.

What were/are the government-imposed restrictions on your business operations? Keep a record of the dates that restrictions were imposed and lifted. How have your days and hours of operation been affected?

How are your revenues being affected? Be specific; how is it being affected by month orCreate good covid notes by customer? Which customers have gone out of business or changed their purchases in a way that affects you?

Has there been any disruption in your production or supply chain? If there is a disruption or delay, when will production/supply resume and how soon can you take delivery once that occurs?

How are your costs being affected? If you are incurring significant costs related to protecting employees and customers from Covid-19, it would be a good idea to create an expense category to track these expenses.

Have you asked for and received any reductions in rent or any other accommodations from your landlord? Include that information and any other notes on communications with the landlord which may be relevant.

What was your staffing each week? If your operations were affected by employees who did not want to return to work for fear of catching Covid-19 or making more on unemployment than by working, keep a record of that. Include how that affected your sales and income.

If you took out a PPP loan, or other special Covid-19 related loan, how is that being shown in your financial statements?   If a portion was forgiven, that should be noted. Did you keep people on the payroll who may not have been needed at the time so they could receive payroll that was forgiven? If so, keep track of who and for what period.

How has the situation affected the amount of working capital needed to operate the business?

How has the situation changed the way you’ve operated your business?

In addition to these questions, your business may be affected in other ways. Keep track of those. Hopefully, Covid-19 will be in the past soon. But, at best, it will probably affect us for a year or more. In order for business buyers and lenders to analyze your business properly, they need to know what happened at your business during this time. Keep good records to make the sale of your business go smoothly.



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