This is shaping up to be a record year for small business transactions.
BizBuySell Q2 2017 Insight Report
According to the latest BizBuySell Insights Report, there were a total of 2,589 closed transactions (small businesses that were bought and sold) in the second quarter. This was followed by 2,368 and 2,534 closed transactions in the first quarter of 2017. At this pace, 2017 is setting up to be a record year for these types of transactions. That would break the record set just last year.
So the obvious question is, what is driving these record-breaking quarters?
As with the vast majority of economic forecasts, it can’t be attributed to one single thing. But the continuous surge of the US stock market, possible tax reforms and fewer regulations by President Donald Trump, and a solid economy seem to be helping the cause. All of these factors and others are pushing individuals to purchase and sell small businesses in record numbers.
Bob House, president of BizBuySell.com and BizQuest.com, backed this outlook by saying, “Our recent conversations with brokers and previous research shows both buyers and sellers are confident in today’s business-for-sale environment. This streak of record-number transactions confirms this sentiment and suggests many are capitalizing on today’s hot market.”
Some of the Other Numbers for Q2
The median revenue of the businesses sold in in Q2 of 2017 grossed $507,865. This was an 11.2 percent increase from a year ago.
The one downturn is the selling price. In Q2 of 2017, the median sale price was at $237,000. Right now it is down to $225,000, despite the fact the median sale price is up year-over-year from $216,000 in 2016 (Q2).
Another important data point is the fast closing rate, which shows the eagerness of buyers in the market. The median time to sell a business now stands at only 146 days, down 14.6 percent from the 171 days in Q2 of 2016.
If you have been waiting for the right time to sell your small business, 2017 might be the year. Bob House, said, “Barring unforeseen factors, we anticipate 2017 will set a new record for the number of businesses sold in a single year since we started reporting on this data in 2007.”
Image: BizBuySell