Results from a survey conducted by BizBuySell.com suggest that 2011 may be the time to sell for small business owners.
BizBuySell.com, the Internet's largest marketplace for buying or selling a small business, recently released the results from a recent survey of the nation's business brokers on the state of the business-for-sale market. 73% of brokers said that the number of buyers interested in purchasing a business is increasing, while 54% said the number of owners looking to sell is increasing. "There are more buyers than sellers. Wealthy buyers are stepping up to buy businesses instead of stocks. This is a seller's market," said one surveyed broker. Additionally, about 66% of brokers said market conditions will improve over the remainder of 2011, and 51% said they expect to see even more transactions in 2012. "These numbers suggest that there is currently more demand for businesses to buy than supply of businesses to sell," explained Mike Handelsman, Group General Manager of BizBuySell.com and BizQuest.com. "This, plus the fact that the market will likely improve over the course of the year and into next year, means that business owners looking to sell should think about doing so now."
Despite the improving market, 41% of brokers report that the small business environment continues to be challenging, and is the number one factor in preventing business transactions from closing. "People are scared to trade what they know for what they are not sure of" one broker said. Another broker noted that "the economy may be a bit better, but there is still a lot of fear about the future, and that makes decision-making difficult. The 'do-nothing' decision seems easiest."
Consistent with the past three BizBuySell broker surveys, the majority of business brokers nationwide do not feel confident that business transaction volumes will return to pre-recession levels in the near future. 55% of the brokers surveyed think it will take more than two years for transaction volume to return to pre-recession levels, while another 27% estimate it will take 18-24 months. Many small businesses had sales drop during the recession and have not fully recovered. "The economy certainly continues to be challenging, but I think the biggest takeaway for business owners looking to sell is that if you have a solid business, now is likely a good time to plan to exit," Handelsman noted. "I'd echo one of the surveyed brokers when he said 'good businesses that are profitable will always have value and will always sell.'"