Market for small businesses cools further, report says

ABC News Finance 1 week ago

The market for small businesses cooled further during the third quarter as fallout from trade wars made companies look less appealing to buyers.

That's the finding of a quarterly report analyzing small business sales released by BizBuySell.com, an online marketplace for companies. BizBuySell.com counted 2,454 small businesses sold during July-September, down 8.6% from 2,685 sold in the same period last year. That followed declines of 9.6% in the second quarter, 6.5% in the first quarter and 6% during the last three months of 2018.

Some owners who were considering selling are now holding off because they're concerned they may not get a good sales price for their companies. And tariffs raise costs and therefore threaten a company's profitability, making the business less attractive to a potential buyer. That and fears about a recession are limiting what buyers are willing to pay for companies.

The median sales price for a business edged up just 0.1% during the third quarter from a year earlier, said BizBuySell.com, which based its findings on a survey of small business brokers across the country. Asking prices rose 3.3%, but owners found they had to take less money than they wanted to complete a sale.

Some small business owners are reluctant to put their companies on the market, while others are thinking more seriously than in the past about what they need to do to make their companies more likely to sell. Attorney Joel Morgenthau has noticed an increase in the number of owners calling for advice, asking, "what should I be doing if I want to sell?"

But with interest rates falling, it's still a good time to be buying, says Morgenthau, a partner with Moritt Hock & Hamroff in New York. He also warns owners who want to hold out for a better price that they might keep seeing prices falling instead.

"If they're savvy, they realize it does not make sense to hold on for the best price," Morgenthau says.

Although sales are down and prices have lost their momentum, companies can be a good buy because they're generally in good financial shape after years of economic growth, BizBuySell.com says.

—————

Follow Joyce Rosenberg at www.twitter.com/JoyceMRosenberg . Her work can be found here: https://apnews.com .


Source link
Read also:
The New York Times › Finance › 1 week ago
The market for small businesses cooled further during the third quarter as fallout from trade wars made companies look less appealing to buyers.
Business Insider › Finance › 1 month ago
Nominations are now open for Small Business of the Year, Woman-Owned Small Business of the Year, and Small Business Owner Under 30 of the Year Active Amazon Seller or Vendor small businesses can nominate themselves on the award's website until October...
Business Insider › 1 month ago
Small businesses represent around 99% of all US businesses, and employ about half the workforce, according to the US Small Business Administration. Government and private institutions often use their own models, which may exclude some businesses for...
The Guardian › Finance › 2 months ago
Small businesses aren’t listening to the recession talk as of late – they’re continuing to invest, grow and hire at historically high levelsThere’s been a lot of talk of recession lately but small businesses, for the most part, don’t seem to...
Forbes › 3 weeks ago
A full 70% of small businesses don’t make it past their tenth birthday. Here are 8 of the most common reasons small businesses fail and what entrepreneurs should do instead.
The Sun › Politics › 1 month ago
MINISTERS have been urged to give small firms a pre-Brexit boost by giving them vouchers to help them sell their good abroad. The Federation of Small Businesses said export vouchers worth up to £3,000 would help small firms deal with costs such as...
Business Insider › Finance › 1 month ago
OutboundEngine provides digital marketing tools and services for small and medium-sized businesses. It helps small companies and operators set up websites, maintain their social media presences, and conduct email marketing campaigns. To date...
Business Insider › Finance › 1 month ago
The unemployment rate is at record lows, and small businesses are struggling more than ever to fill essential positions. Bank of America's head of small business says that small firms think creatively about their health care and benefits offerings in...
Business Insider › 1 month ago
More than 1,300 sellers nominated themselves for consideration to be one of Amazon's Small Businesses of the Year. Amazon announced a total of 18 finalists across 3 categories: Small Business of the Year, Women-Owned Small Business, and Small Business...
Business Insider › 2 weeks ago
Social media marketing is an important part of building a customer base and generating sales, but for some small businesses, it can feel daunting to stand out in an overcrowded space. At Mastercard's first Small Business Summit, one panel of women with...
Sign In

Sign in to follow sources and tags you love, and get personalized stories.

Continue with Google
OR