According to a recent BizBuySell.com report, a record number of small businesses changed hands in 2017, up 27% from 2016. There were 9,919 transactions closed in 2017 compared to 7,842 in 2016. This year-over-year growth rate is the largest since 2013.
“The economy is in a good position,” says Bob House, president of BizBuySell.com. “A lot of Baby Boomers are ready to sell, and a lot of buyers are optimistic about the future.”
Nationally, the median revenue of sold businesses grew 5.8% from $472,798 in 2016 to $500,000 in 2017. Median cash flow also increased, up almost 7% to $115,000 from $107,551 the year prior.
According to the BizBuySell survey of over 5,000 business brokers, when asked for the top reasons for the increase in transactions, brokers cited:
- Improving small business environment, including strengthening revenue and profit numbers (28%)
- Increasing number of owners looking to sell (21%)
- Increasing number of qualified buyers on the market (19%)
58% of surveyed business brokers credited more than half of their 2017 sales to Baby Boomer owners.
The Bottom Line:
80% of business brokers expect the number of business sale transactions to increase again in 2018. Owners looking to sell soon need to be ready to take advantage of this favorable market by preparing their businesses for sale. The best way to maximize business value, achieve your goals, and increase the likelihood for a successful business transaction, is to be prepared.
Other Business Transition News
- The Missing Piece in Succession Planning for Family Businesses (Familybusinessinstitute.com)
Watch this video about the importance of management succession planning for long term success of your family business.
- Business Owners' Love of Work May Hinder Succession Planning (Prnewswire.com)
Over 70% of business owners polled in a recent nationwide survey noted that they are not planning to retire, don't know when they'll retire or do not plan to retire for 11 years or more.
- Are Your Kids Ready To Run The Family Business? (Forbes.com)
Some sage advice if you’re thinking about transitioning your business to your children.
Our mission is to assist the owners of privately held companies in making key transition decisions that impact their future as well as the future of their businesses, families, and employees.
As a business owner and co-founder of BTA, Jane Johnson recognized the need to educate business owners about the importance of planning ownership transitions to achieve their goals and ensure business continuity. The challenges Jane experienced with selling her own business inspired her to co-author the book Cashing Out of Your Business – Your Last Great Deal and develop tools and resources to inform and empower other owners to plan and execute successful ownership transitions.