Small Business Transactions On The Rise
Interested in selling your company this year? There’s a better-than-usual chance you’ll find a buyer.
That’s according to BizBuySell, which reports that small-business transactions jumped more than 61 percent in the second quarter of 2013, compared to the like period last year-;and the largest year-over-year increase since the beginning of 2008. All told, 1,827 transactions closed in the second quarter versus 1,129 closed in the second quarter of 2012.
That’s a positive development for small business owners interested in putting their companies on the market.
Why the uptick? A recovering economy has led to an increase in the number of both business sellers and buyers. What's more, the financial performance of small companies is contuing to improve as well, which makes them more attractive prospects.
There's also another, more surprising, factor to consider: Last dall's fiscal cliff drama in Washington. That debate raised the specter of higher personal and business taxes. And that was enough to lead many small-business owners to put their companies on the market. Since selling a business typically takes at least six months, a good number of those sellers were not able to close their sales by the end of 2012. Instead, these sales are closing now.
Released quarterly, BizBuySell.com’s Insight Report tracks changes in the number of closed small business transactions, valuation multiples, and other economic indicators for the small business transaction market. The report is based on closed transactions voluntarily submitted by business brokers nationwide and is one of the best indicators of this important measure of entrepreneurial vibrancy.