BizBuySell reports that owners are receiving higher prices for their companies and that the number of transaction saw an extreme increase of 49% in 2013. BizBuySell collects data from business brokers such as Sunbelt Business Brokers of Minnesota. In 2013 business brokers reported over 7,000 transaction up from approximately 4,700 transaction in 2012.
The report states: “The dramatic increase in 2013 small business sales can be attributed to multiple factors, including the improving economy, strong supply and demand fundamentals (i.e., an aging business owner demographic and an increase in the number of qualified business buyers) and continued improvement in small business financial performance.” The report also highlighted what we’ve seen across many of Sunbelt’s 200+ offices: small and mid-size business revenue is increasing AND cash flow is growing. Because most businesses sell for a multiple of cash flow this fact is driving prices up.
The report also highlighted that retail and restaurants saw the biggest increase in transactions. For Sunbelt Business Brokers of Minnesota we also saw improvements in businesses for sale in virtually every industry including Service, Manufacturing, Technology, Distribution and Construction. The Wall Street Journal and Inc. also report dramatic improvements in the business-for-sale marketplace.
2014 looks like an excellent year for business owners to sell and those with profitable companies can demand a strong price. Terms have also improved as bank financing, once endangered by the recession, has returned with a vengeance.
If you are thinking about selling your business, or just want to know what your business is worth in today’s marketplace, Sunbelt is offering a free seminar for business owners. We’ll be discussing: How to Maximize your Price and Cash at Closing, Strategic and Financial Buyers and which one pays more, How to Value your Business and How to Mitigate Taxes. We’ll have a panel of experts available for your questions as well. Click HERE for more information on the seminar.
