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BUYING A SMALL BUSINESS

More Businesses on the Market

Brokers say many baby boomers are heading into retirement by selling their businesses.
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With baby boomers heading into retirement, brokers are starting to see more of their small businesses on the market. And while owners are asking slightly less than last year, final purchase prices are creeping up.

Over the first quarter of the year, nearly 1,800 businesses were sold nationwide, compared to 1,500 over the previous quarter and just 1,000 from July to September, according to a report by BizBuySell.com, a San Francisco, Calif.-based online broker.

Though median asking prices dropped this year by $5,000 to $250,000, median sales prices rose by $12,000 to $200,000, the report said.

According to Mike Handelsman, BizBuySell's general manager, tighter credit conditions will likely put downward pressure on selling prices in the year ahead.

"What we think is going to happen over time is that an increasing number of sellers will come into the market as baby boomers reach retirement age," Handelsman said. "It may be difficult for buyers to gain access to credit to buy those businesses, which would decrease demand and put pressure on the price in a less competitive market."

Handelsman said that pressure has yet to impact the current market, though he expects it to build throughout the year.




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