BizBuySell.com, the internet’s largest and most heavily trafficked business for sale marketplace, recently provided their Insight Report for 2013- a summary of small business sales as reported by business brokers for calendar year 2013.
With the most robust growth since 2009, small business transactions jumped 49% last year with restaurants and retail sporting the largest gains. Restaurant transactions were up 78% followed by retail business sales seeing a 71% increase.
According to BizBuySell, the improvement is the result of four factors:
• Improving economy
• More businesses for sale (supply outpaced demand)
• Increase in qualified buyers due to improved lending
• Overall improvement in the small business sector
The average revenue of small businesses sold was $405,905, up 13%, while the average cash flow was $97,999, up 9%. The average sale price was up 13% to $180,000.
Business sale multiples decreased marginally with the average sales price as a multiple of cash flow about 2.2-2.3% and average sales price as a multiple of revenue around 60%.
Business sellers received about 88% of their asking price in the 4th quarter of 2013.
Contributed by Jeff Durham. Jeff is the president of Business Brokers & Consultants of Indianapolis. You can learn more about how to sell your business in addition to small business consulting at http://www.bbcindy.com.