Since 2008, many small business owners have struggled to sell their companies, especially for the prices they had once hoped for. However, according to new research conducted by online business marketplace BizBuySell.com, the number of businesses being successfully sold is on the rise.
BizBuySell reports that total transactions over the past three months have increased by about 3% compared to the same period last year. The business-for-sale marketplace bottomed out in 2009, and–despite a 1.6% decline in the second quarter of 2012–the recent sales increase reflects what has been a gradual improvement over the past two years.
Mike Handelsman, group general manager of BizBuySell and BizQuest, says “Over the past two years we’ve seen similarly small increases in the business-for-sale market as economic conditions and overall business performance have improved.” Handelsman concludes that “This quarter’s growth was likely assisted by sellers looking to exit their businesses before the anticipated increase in the capital gains tax rate at the close of 2012.”
In addition to the reported increase in total business sales, the average price of sold businesses has risen to its highest point in over two years. The average sale price last quarter was $174,000–a $25,000 increase over last year’s average, according to BizBuySell’s research.
Handelsman attributes increasing sale prices to the improved overall health of many small businesses: “Since the recession hit in 2008, most sellers have been forced to settle for lower than expected sales prices. But as their business financials improve, more sellers are more confident and it’s paying off in the form of higher sale prices.”
Brooks, Chad. “Sales of Businesses On the Rise” Business News Daily, 10/16/12.