According to BizBuySell.com, one of the Internet’s largest business-for-sale marketplace, a record number of businesses changed hands in the 2017, eclipsing 2016 total by 27%. The full results are included in BizBuySell’s Q4 2017 and year-end Insight Report, which aggregates statistics from business-for-sale transactions reported by participating business brokers nationwide. Additional highlights of the report include…
- For several years after the 2008-2009 Great Recession, sales volume remained low as small businesses struggled financially and capital for financing remained tight. Beginning in 2013, as the economy recovered, closed transactions have steadily increased. But 2017 represents a significant increase over 2016. This year-over-year growth rate is the largest since 2013.
- To what’s behind this high transaction volume, BizBuySell surveyed over 5,000 business brokers to get their expert opinions on the market. When asked for the top reason for the increase in transactions, brokers cited the improving small business environment, including strengthening revenue and profit numbers (28 percent), the increasing number of owners looking to sell (21 percent) and the increasing number of qualified buyers on the market (19 percent).
- Stronger financials allowed owners to list their business for more, with asking prices jumping 11 percent. As the higher prices are attached to more valuable businesses, buyers are driving median sale prices to increase 14 percent in 2017.
- Baby Boomers, who sat out the recession waiting for business values to recover appear to be selling. In fact, 58 percent of surveyed business brokers associated more than half of their 2017 sales to Baby Boomer owners.
- The franchise market created much of the growth in 2017. In fact, closed transactions of existing franchised business locations made a 45 percent leap in 2017 compared to 2016. Within the annual 2017 data, roughly 9.5 percent of reported transactions were franchised businesses.
- Industry-wise, retail has been a hot topic with new pressures coming from online sales giants like Amazon. Speculation is stirring that the company will also consider acquiring another retailer in 2018. However, 2017 continued to show strong retail financials on the small business front. In fact, median revenue for sold retail businesses jumped 17 percent from just a year ago. The median sale price of those sold retail shops grew in conjunction with the revenue, up 11 percent.
You can find the full report at: