Small and Mid-Sized Deals Increase in 2016

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gavinraphael:

This is good news for buyers and sellers! Light & Raphael also saw a significant uptick in business transactions in 2016.

BizBuySell Insight ReportsRecord Number of Small Businesses Were Bought & Sold in America in 2016; Trump’s Election Spurs Optimism Among Small Business Owners According to BizBuySell.com Report

BizBuySell.com’s Fourth Quarter 2016 Insight Report shows small business transactions continue to reach new highs as growing financials make for a hot market

San Francisco, CA – BizBuySell.com, the Internet’s largest business-for-sale marketplace, reported today that annual small business transactions reached record levels in 2016, topping 2015’s totals by 8.6 percent and 2014’s previous high by 4.6 percent. The full results are included in BizBuySell’s annual and Q4 2016 Insight Report, which aggregates statistics from business-for-sale transactions reported by participating business brokers nationwide.

A total of 7,842 closed transactions were reported in 2016, the highest yearly total of small business sales since BizBuySell first started tracking data in 2007. This total confirms the positive assessment of the 2016 small business market by business brokers as recorded in BizBuySell’s December survey. According to the survey, 63 percent of respondents experienced more deals in 2016 than in 2015. Primary factors for the reported growth include an improving small business environment, more owners looking to sell, more qualified buyers on the market and better financing options.

2016 financial indicators echo the sentiment of an improving small business environment. The median revenue of sold businesses grew 5.2 percent from $449,462 in 2015 to $472,798 in 2016. Median cash flow also increased, up to $107,551 from $102,000 the year prior. These growing financials likely enticed more buyers into the market, spurring transactions.

Despite the increased demand in 2016, owners did not respond with higher prices. The median asking price remained flat from 2015 at $225,000, while the median sale price increased a mere half a percentage point to $200,000. These figures put the average sale-to-asking price ratio at 92 percent. Such a strong ratio indicates the market is becoming more balanced, with both parties coming closer together in their assessment of fair market value.

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