According to the latest BizBuySell Insight Report, business for sales transactions showed steady growth in the first quarter of 2022. Small business acquisitions rose to 24% year-on-year and just 3.7% lower than in the first quarter of 2019, before COVID-19 shocked the market.
Small Business Sales Report – Q1 2022
Buying and selling activity has steadily increased since it fell to 39% in the second quarter of 2020, as businesses closed during the pandemic lockdown. In addition, median selling prices remain at record levels, up 6% from the prior year to $345,000.
In the first quarter of 2022, a majority of entrepreneurs (55%) decided to sell their company citing retirement. Another 31% mentioned the potential to now get a good price for selling their business. Surprisingly, economic factors such as potential COVID spikes and fears of a recession played very little as reasons to sell.
More than 63% of those surveyed say they are over 50 years old and 30% say they are over 60 years old. In addition, more than a third (37%) admit they plan to sell their business within two years. This signals a shift in which more and more baby boomers are retiring.
“The number of sellers is stable this year compared to 2021. But the average age of our seller is now higher (closer to 70 versus 65 years). The seller’s (or their spouse’s) health concerns increasingly determine the decision to sell,” said Robert A. Flynn, Managing Member of United Brokers Group.
Demand for profitable companies remains strong
Despite economic uncertainty, companies continue to sell at a rapid pace, with the median number of days on the market falling 5% to 181 days, slightly more than the 185 days in 2019. This is because about 25% of buyers say they want new ones. trends or opportunities they want to take advantage of, while an equal number (25%) believe there are a variety of good companies to choose from.
Service companies that have been relatively less affected by the pandemic remain the most sought after companies. About 35% of buyers today say they are looking for a service company. Over the past five years, the number of service businesses that change hands has grown to nearly half (45%) of all reported business transactions, compared to 37% in the first quarter of 2017.
This post Business sales close to 2019 levels, but inflation is a concern was original published at “https://smallbiztrends.com/2022/04/bizbuysell-2022-quarter-1-small-business-sales-report.html”