State of the Market
Whether you are selling a business or buying a business, there is some Questions that are frequently asked of business brokers
So how’s the market? Are there buyers around? Are there many good businesses coming onto the market? These are questions that we are asked regularly from buyers and sellers alike.
At the moment, the business sales market can be split into two categories… The first of these categories are businesses making profits under $150,000. This segment of the market has plenty of stock available. In fact in excess of 60% of the businesses advertised for sale at the moment fall into this category.
Unfortunately for the many sellers in this group, buyer interest can be patchy. A comment that I often hear from perspective buyers is that if a business is not making them $150,000 per annum, the stress and the responsibility that comes with business ownership is just not worth the risk.
There are exceptions to this such as if the business is home based, allows flexible hours or if its run under management. But as a rule of thumb, businesses in this category sell for lower multiples and can take a longer time to sell.
The other category as you may have guessed is businesses that generate profits above $150,000 per year. This area is the complete opposite of the former. It represents the smallest number of opportunities on the market, but also the greatest demand.
Buyers in this category are generally not first time business owners and are more astute. They know what they want and usually move quickly when they find it. The complaint that we hear the most from buyers here is that its so hard to find the right business.
The good news for business owners is that if you own a profitable business, market conditions are in your favor with plenty of buyers still waiting for the right opportunity.
Business lenders also seem to be looking more favorably on business buyers at the moment with finance seemingly being a little easier to get through.
If you have a specific question, or want some more information on the business sales market please feel free to contact Michael Yared
