Key Findings from the Recent BizBuySell Insight Report: A Brief Analysis
Whether you’re considering buying or selling a business, it’s beneficial to examine the BizBuySell quarterly reports. These documents, collated from approximately 50,000 businesses across the U.S., provide insights into sales and listing prices, successful transactions, and prevailing trends that could potentially impact your business decisions.
Prosperous Times for Sellers
The most recent BizBuySell report covering Q4 2021 indicated a flourishing market for sellers, with sales figures surpassing pre-pandemic levels seen in Q4 2019. This marked a significant rebound from the 2020 sales slump. Despite the usual fourth-quarter sales dip, 74% of brokers reported steady sales, a trend that appears to have persisted into early 2022.
Other noteworthy sales statistics include:
- 8,647 closed transactions in 2021, an uptick from 7,612 in 2020.
- A year-over-year sales price increase of 16%.
- Median cash flow growing 10% year-over-year.
Buyers Pursue Quality
When it comes to buyer preferences, 60% of surveyed buyers indicated that robust financials were a non-negotiable requirement when considering a business for purchase. This stands in stark contrast to the mere 18% of buyers who deemed discounted opportunities a top consideration.
Impact of Labor Shortages
The BizBuySell report also highlighted the pressing issue of labor shortages, with 64% of surveyed owners acknowledging its impact on their businesses. Business brokers concurred that labor shortage was currently the most significant challenge facing small businesses. Another related concern was supply chain disruptions, which 75% of business owners claimed had affected them.
Emerging Balance in Business Landscape
When brokers were asked whether they thought owners were more or less inclined to sell their businesses in 2022 compared to 2021, a growing sentiment emerged: they expected more businesses to be sold this year. While 2021 was considered a buyer’s market, brokers now perceive a shift towards a more balanced landscape.
In conclusion, the trends extracted from the BizBuySell reports paint an encouraging picture for sellers, with a strong market bolstered by high sales prices and steady transactions. Buyers, on the other hand, are increasingly discerning, prioritizing businesses with solid financials. Understanding these trends is instrumental in navigating the dynamic business marketplace, whether you’re a prospective buyer or seller.
