Small Business Exit Sales Gain Momentum
Written by Ken Gaebler
New data shows a boom in the sale of small business during Q3, setting a trend that experts expect to continue for the foreseeable future.
It's been a long wait, but there is finally some good news for small business sellers. Following sluggish sales during the economic downturn and post-recession recovery, the business-for-sale marketplace is finally gaining steam with a higher volume of businesses changing hands during the third quarter.
According to a recent AP report, the volume of business deals completed during Q3 surged by more than 40 percent. During the low point of the recession in Q2 2009, the online business-for-sale marketplace, BizBuySell.com, logged just 1,040 closings. During Q3 2013, that number skyrocketed to 1,685.
Factors behind the bump in business sales include retiring baby boomers, a loosening of the credit crunch for buyers and healthier bottom lines--conditions that industry experts predict will carry the brisk pace of the business-for-sale marketplace into 2014.
"Next year could be a year of extreme growth, given the trend we've seen this year," said Curtis Kroeker, general manager at BizBuySell.com.
The increase in small business sales may also be due to more realistic expectations by sellers. As the nation emerged from the economic downturn, many sellers expected to receive pre-recession prices for their companies. When the market failed to respond, these sellers lowered their prices to make their companies more appealing to buyers.
But despite price adjustments, the average sales price is up 3.4 percent from 2012, underscoring the increased purchasing power of buyers. In addition to improved access to commercial borrowing, many business owners are providing the option of seller financing to close deals.
The current marketplace bodes well for owners who are interested in retiring or moving on to other business opportunities. But selling your business should never be a spur of the moment decision. By carefully planning and strategizing your sale, you can improve the sale price and ensure that your business continues to thrive long after you have made your exit from the company.
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