January 7, 2010
Service businesses and restaurants lead the recovery as business-for-sale closed transaction prices return to levels not seen since mid-2008
San Francisco, CA - January 7, 2010 -- According to today's BizBuySell.com Insight Report, closed business-for-sale transactions declined by 28 percent in 2009, but a recovery that began mid-year continued to gain momentum in the Fourth Quarter.
BizBuySell.com is the Internet's largest marketplace for buying or selling a small business. The company releases its BizBuySell.com Insight Report on a quarterly basis, reporting changes in closed transaction rates, valuation multiples and other economic indicators for the small business transaction market. Closed transactions are reported to BizBuySell.com by business brokers nationwide.
"Many business owners delayed plans to exit their businesses and retire in 2009," says Mike Handelsman, General Manager of BizBuySell.com. "In the latter part of 2009, we started to see clear signs of recovery, and 2010 is now shaping up to be a much more productive year for selling and buying businesses."
Business-for-sale transaction pricing is returning to levels not seen since mid-2008, due to increased demand for small businesses as a result of higher unemployment as well as the slow return of capital available to business buyers.
The median closed-transaction sale price rose 1.4 percent year-over-year in the Fourth Quarter of 2009. Closed-deal sale prices had been dropping steadily in prior quarters, with the three previous quarters recording year-over-year declines of 21 percent, 20 percent and 17 percent, respectively. In the Fourth Quarter, the median sales price stood at $180,000.
Restaurant and Service Businesses Lead the Recovery
While manufacturing businesses and many retail businesses remain less active categories for business-for-sale transactions, the recovery in the industry has been led largely by service businesses and restaurants.
In the Fourth Quarter, restaurant sales were up 1 percent versus prior year sales for the same quarter, while service businesses declined by 4 percent. In comparison, the sale of manufacturing companies was down 27 percent in 2009, and other business categories were down by 20 percent or more.
"As the economy recovers, businesses that don't require massive capital investment and businesses that appeal to customers who are still not in a strong financial position seem to be more appealing to business buyers," notes Handelsman. "Business owners in those industries are seeing an opportunity to sell their companies that simply was not there six months ago."
Business-for-Sale Transaction Recovery Predicted for 2010
BizBuySell.com projects that 2010 will show slow but consistent recovery in the business-for-sale market, citing the following industry drivers:
BizBuySell is the Internet's largest business for sale marketplace. Since 1996, BizBuySell has offered tools that make it easy for business owners and brokers to sell a business, and potential buyers to find the business of their dreams. BizBuySell currently has an inventory of approximately businesses - spanning 80 countries - for sale at any one time and receives more than unique monthly visits. The site also features an extensive franchise directory as well as an easy-to-use business valuation tool. Please visit www.bizbuysell.com for more information.
BizBuySell was founded in 1996 and in 2012 became a division of CoStar Group, Inc. (NASDAQ - CSGP) - commercial real estate's leading provider of information and analytic services. CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information and offers a suite of online services enabling clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. For more information, visit www.costar.com.
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