Business sales are soaring—and I don’t mean individual business revenues. The latest BizBuySell Insight Report reveals that 20% more businesses were sold in the second quarter this year than in 2023. Altogether, 2,448 businesses were sold, with an enterprise value of $1.9 billion. BizBuySell says, “Transaction volume has made a strong rebound and now matches 2019’s pre-pandemic levels.”
The small business owners who are selling are happy—“demand has pushed the median sale price up 25% year-over-year.”
And there’s even better news ahead. BizBuySell says, “With interest rates expected to be cut relatively soon, this opens the path for a boon to an already rising business-for-sale market.” In its recent small business survey, 24% of business buyers say they are waiting for interest rates to decrease before purchasing.
Buying a Business Tips
If you’re looking to buy a business, business buyers shared their tips with BizBuySell:
- 58% plan to negotiate a lower selling price
- 42% are shopping around, looking for lower interest rates
- 42% are seeking alternative financing methods
- 30% will increase their down payment
- 21% will seek shorter loan terms
To help close the deal, 24% of those selling their companies will consider seller financing, and 65% of buyers consider seller financing extremely or very important. Among sellers open to offering financing, 23% are willing to go as high as 50% of the purchase price.
What Do Buyers Want
When considering a purchase, 42% of buyers rate “financial performance” as the most important factor, 26% say it’s growth potential, and 15% say location is the top factor.
Most desirable opportunities:
- 69% want recession-resistant businesses
- 38% want thriving businesses
- 20% will take on some risk and buy a “fixer-upper” for a lower purchase price
- 11% want to buy a closed business to acquire the location or assets only
Who is Buying Businesses?
Of those buying businesses, 35% identify as corporate refugees, 14% are recent retirees, and 12% are recently unemployed.
Market Outlook
The BizBuySell Report expects the business-for-sale market to continue growing at a modest pace in the second half of 2024—37% of business owners expect their company’s value to increase over the next year.
Garrett Monroe, sell-side director of Calder Capital, told BizBuySell he expects 2024 to finish strong. He thinks there’ll be an “uptick in volume of transactions” in 2025 and says that as long as owners are willing to be realistic, 2025 will be the best volume year yet.
There’s a lot more detail in the BizBuySell Report. It’s definitely worth a read.
Business for sale stock image by BreizhAtao/Shutterstock
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbusinesscurrents.com, follow her on Twitter @Rieva, and visit her website SmallBusinessCurrents.com to get the scoop on business trends and sign up for Rieva’s free Currents newsletter.