Still facing an uncertain economy, some small business owners say this is the year to sell your business.
Changing tax rules and uncertainty about the future have made some small business owners eager to sell in 2012, according to Reuters.
With the low capital gains rate set to expire and possible changes coming to the gift and estate tax rules, some small business owners would rather get out now than see what happens.
"We're also seeing a lot of businesses that really went through a tough time in the recession and have now kind of bounced back as survivors," Michael Butler, CEO of Seattle-based Cascadia Capital, an investment bank, told the outlet. "People are saying, ‘Hey, the risk-reward is skewed such that I think I had better just try to sell now than go through another cycle.'"
Possible hurdles in the future? If the capital gains rate (now at 15%) expires, it could be increased to 20%, which would translate to $50,000 more in federal income tax per each $1 million in profit, according to Reuters.
While it seems more and more small business owners are looking to sell, interest reportedly is up among buyers also. Brokers report these optimistic buyers are particularly interested in "recession-proof" niches like home health care and educational services, according to Reuters.
Nearly 4% more small businesses were sold in the first quarter of 2012 than the same time last year-- the most since the fourth quarter of 2008, according to Reuters, citing BizBuySell.com data.
CAITLIN BERENS writes about business innovation and entrepreneurs. Before Inc., she worked at Billboard, SELF, and Better Homes and Gardens. She attended Drake University, and lives in Brooklyn, New York. @CaitlinBerens