Buying or Selling a Business? Business for sale market returning to 2008 price levels.
Posted by Marc Gudema on Tue, Jan 12, 2010 @ 02:38 PM
If you are thinking of selling your business or in the market to buy a business, you should know how the market is doing. BizBuySell recently issued a report on the market for business sales in the fourth quarter of 2009. BizBuySell.com is the Internet's largest marketplace for buying or selling a small business.
Here are some comments from the report:
"Many business owners delayed plans to exit their businesses and retire in 2009," says Mike Handelsman, General Manager of BizBuySell.com. "In the latter part of 2009, we started to see clear signs of recovery, and 2010 is now shaping up to be a much more productive year for selling and buying businesses."
"Business-for-sale transaction pricing is returning to levels not seen since mid-2008, due to increased demand for small businesses as a result of higher unemployment as well as the slow return of capital available to business buyers."
"The median closed-transaction sale price rose 1.4 percent year-over-year in the Fourth Quarter of 2009"
"While manufacturing businesses and many retail businesses remain less active categories for business-for-sale transactions, the recovery in the industry has been led largely by service businesses and restaurants."
"BizBuySell.com projects that 2010 will show slow but consistent recovery in the business-for-sale market, citing the following industry drivers:
* Latent Supply. For the past 12-15 months, small business owners have focused on keeping their businesses afloat, and finding ways to earn a living, rather than focusing on a potential exit. That latent supply will begin to hit the for-sale market as the economy and prospects for finding motivated and qualified buyers improves.
* Unemployed Workers Seeking Jobs. With unemployment hovering above 10 percent in most markets, laid off workers will increasingly look to "buy a job" by finding a small business to provide income.
* Easing Credit. With both supply and demand for small business transactions increasing, the remaining key ingredient to return the market to full health is the availability of purchase capital. The Federal Government and the SBA have been focused on helping banks ease their lending restrictions to provide necessary capital to the small business market.
* Baby Boomer Retirees. In addition to the improving market dynamics of supply and demand there is an ongoing macro trend of the U.S. baby boomer population reaching retirement age. As increasing numbers of small business owners near retirement, this trend will continue to bring above average numbers of small businesses to the sale market"
