BizBuySell's Insight Report showed a record number of businesses changing hands in 2017, jumping 27% over the previous year. With small business sales closing faster and at record-high average sale prices, this brings into question, who is behind all this activity? What sort of changes are taking place within the small business landscape? Taking a closer look, BizBuySell surveyed 2,300 small business owners and buyers to study the characteristics of those driving this activity.
What did the study reveal about small business owners and buyer demographics?
Small business buyers are getting younger than existing owners.
The majority of those seeking to buy a business are now under 50 years old, while the majority of those who own a business are over 50 years old.
Small business buyers are more ethnically diverse and more likely to be immigrants, compared to owners.
Both small business owners and buyers are made up of over 75 percent men. Yet, 71 percent of small businesses are owned by White/Caucasians, while only 65 percent of buyers are White/Caucasians. Asian/Pacific Islanders is the predominant minority in both these groups. 48 percent of owners are first-generation U.S. immigrants, compared to 64 percent of buyers.
Sixty percent of small business owners and buyers are either politically conservative or undecided.
While the highest percentage of both groups identify as being a Republican, a higher percentage of small business buyers identify as being a Democrat or undecided. Neither groups identify as being a member of the Green party.
Small business owners earn significantly more money per household than buyers.
60 percent of small business owners say their household incomes are over $100,000, compared to only 46 percent of buyers. At the same time, over 20 percent of buyers earn less than $50,000, compared to only 11 percent of owners.
The study also revealed that while over half of small business owners have been in business for well over 5 years, most remain small in size with less than 5 employees. Over 60 percent started their businesses from scratch, while nearly 30 percent purchased a business or franchise. View the entire study responses for a more complete demographic picture of small business owners and buyers.