Should One Consider Selling Their Established Business or Investing in a Fresh Enterprise?, or is it the Optimal Time for Such Decisions?
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The third quarter of 2013 saw a significant surge in small business sales, according to the BizBuySell Insight Report. A total of 1,685 transactions were closed, marking a 41.7% increase compared to the same quarter the previous year.
The improvement in small business finances has been a key factor in this growth. Median revenues for all businesses grew 8.9% in Q3 2013, reaching $420,000, compared to $385,327 in the prior year. The retail sector experienced a more substantial increase, with the average median revenue for retail businesses reaching $520,000, up from $423,015 a year prior.
The restaurant and retail industries have shown the most growth in business sales. There was a 109.4% increase in restaurant transactions and a 60.9% increase in retail transactions. The combined transactions of these two industries accounted for 54% of all small business sales in Q3 2013, compared to 43% a year ago.
The average sales price of businesses sold in Q3 2013 was $180,000, slightly up from the second quarter of 2013. The median asking price was $199,000, also a slight increase from the previous quarter. Interestingly, the average sales price of restaurants as a multiple of cash flow was 1.83, below that of small businesses in general. This could be behind the growth in sales of businesses in these categories.
The overall economy is improving, making businesses more desirable for purchase. Personal wealth is recovering, providing more funds for potential business buyers. Financing has become easier to obtain compared to the worst days of the recession. These factors have made more owners willing to sell, particularly Baby Boomers.
If you're interested in buying a business, it's important to get your financials in order and explore financing options to be ready to act when you find the perfect deal. If you're considering selling your business, it's crucial to meet with your attorney, accountant, and other key advisors to prepare your business for sale.
BizBuySell states that "conditions are finally coming together," suggesting that the time could be right for selling or buying a business. This is the fifth straight quarter of growth for both asking and sale prices. The search results do not provide information about which industry had the highest increase in small business sales in the third quarter of 2013 or the reasons for any special development at that time. However, the trend is clear: the market for small businesses is on the rise.
