posted by Jan Norman
Orange County’s houses may be among the most expensive in the country, but that’s not true of our small businesses.
That’s the word from BizBuySell.com, a Bay Area-based Web site that at any given time lists more than 48,000 businesses for sale around the country. This is the first time the site has released quarterly data of businesses for sale locally and nationwide.
Here’s the typical business for sale in the third quarter in the Orange County-Los Angeles-Long Beach area:
In comparison, the typical business for sale nationwide:
The chart below gives the breakdown by type of business.
Why the difference? BizBuySell General Manager Mike Handelsman has a few educated guesses.
“The real estate market is based on supply and demand. Orange County is a desirable market because of the weather and proximity to beaches,” he says. “But in the business market, pricing in general depends on a multiple of revenue and cash flow.
“The fixed costs are higher in Orange County (than elsewhere in the nation) because of labor costs, insurance, energy prices, all of which makes it more difficult to make a living from owning a small business,” he adds.
BizBuySell is really a small-business marketplace, with 90 percent of listing for less than $1 million. Although only 10 percent of businesses nationwide are sold through business brokers, the majority of BizBuySell listings are by brokers.
Still, you can list your own business for sale on the site, which recently added a tool to allow you to compare your business by type, location, revenues etc. and find out what comparable businesses are selling for on BizBuySell.
“It’s not perfect, but it’s a benchmark of reported transactions, Handelsman says.