BizBuySell.com, the Internet’s largest business-for-sale marketplace, recently announced the results of its annual Business Buyer-Seller Confidence Index, an indicator of small business buyer and seller sentiment on the current business-for-sale environment. The confidence index is calculated by evaluating survey responses of more than 1,500 people interested in either buying or selling a small business.
A separate score is calculated for both current small business owners interested in selling and prospective buyers currently exploring the market. Each group’s score ranges from 0 to 100, with 100 representing a perfect environment for buying or selling a business.
This year’s results showed sellers feeling more confident that they can successfully exit their businesses as the Seller Confidence Score grew to 62 after two consecutive years at 56. Not only did a majority of owners (58 percent) believe they can receive more money for their businesses than they could last year, but more than 90 percent were optimistic enough to say they will be able to achieve the same or higher sale price next year. Respondents to both questions responded with higher, more optimistic percentages than did the same last year. Overall, this is a good indication that sellers have seen conditions improve since the recession and are confident that favorable conditions will continue in 2016.
Sellers also indicated an increased number of buyers in the market this year. When asked to identify the biggest issues limiting their ability to sell, just 12 percent said they couldn’t find a buyer – a significant drop from the 27 percent who indicated a shortage of buyers in 2014. Perhaps even more importantly, 43 percent of sellers said they have no issues and could successfully exit their businesses right now compared to just 23 percent who felt the same level of confidence last year.
“Small business owners are definitely viewing today’s market as a great opportunity to sell,” said Bob House, Group GM of BizBuySell.com and BizQuest.com. “We’re also seeing this increased confidence translating into more owners actually listing their small business on the market. The number of for-sale businesses on BizBuySell.com reached a six-year high this year, driven by increasing small business financial performance in the post recession period.”
My own business sales, mergers and acquisitions practice based here on America’s Gulf Coast reflects this national trend. We’re busier in my office now than we’ve been since early 2007.
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William Bruce is an Accredited Business Intermediary and Appraiser assisting buyers and sellers of privately held businesses in the transfer of ownership. His practice includes consulting services nationally on issues of business valuation and transfer. He currently serves as president of the American Business Brokers Association. He may be reached at (251) 990-5934 or by email at Will@WilliamBruce.org. His business brokerage website may be viewed at www.WilliamBruce.net.