According to BizBuySell.com, one of the Internet’s largest business-for-sale marketplace, a record number of businesses changed hands in the third quarter of 2017. The full results are included in BizBuySell’s Q3 2017 Insight Report, which aggregates statistics from business-for-sale transactions reported by participating business brokers nationwide. Additional highlights of the report include…

  • Closed transactions reported in the third quarter of 2017 showed a 24 percent increase from this time last year.
  • While many factors may be contributing to the active business-for-sale environment, a solid economy, optimism for tax reform and relaxed regulations under President Trump may be encouraging more entrepreneurs to enter small business ownership.
  • Median revenue of businesses sold during the period showed and 11.2 percent increase from Q3 of 2016.
  • Median cash flow for small businesses listed on BizBuySell jumped 6.9 percent year-over-year. During the same period, the average sales price multiple of cash flow increased from 2.22 to 2.29, while the average multiple of revenue increased 2.8 percent.
  • The median time to sell a business fell 14.6 percent year-over-year from 171 days in Q3 of 2016 to just 146 days. Shorter days on market suggest buyers are confident in today’s small business environment and that buyers and sellers are seeing eye-to-eye on value and getting deals done.
  • The number of small business listings active on the market increased 6.7% versus the same time last year. This suggests many sellers are looking to capitalize on today’s market, giving prospective buyers plenty of options.
  • Retiring Baby Boomers continue to account for a high percentage of available inventory. Specifically, Boomers who held strong through the last recession and are now looking to capitalize on higher prices and a strong market before retirement. It will be interesting to see if the recent trend softening of sale prices encourages even more Baby Boomers to list their business rather than risk and uncertain future.
  • Signaling that retail is down but not out, the number of retail transactions actually jumped 23% in Q3 compared to the same time last year.
  • The number of transactions in the service industry increased by more than 26% in Q3 vs last year.