Infographic: Why Buying or Selling a Small Business is Becoming a Big Deal

buying or selling a small business infographic

This infographic on buying or selling a small business illustrates the growing popularity of entrepreneurship. Transactions of small businesses have climbed steadily over recent years, with 2016 hitting an all-time record high. According to BizBuySell’s Q4 2016 Insight Report, this can be attributed to an improving small business environment, with more owners looking to sell, more qualified buyers on the market and better financing options.

Moreover, small business optimism has increased significantly in recent months. The NFIB Optimism Index jumped 7.4 points between November and December 2016, reaching an all-time high of 105.8. The NFIB attributes this gain to expectation for real sales gains and outlook for business conditions. Yet, there may also be a political connection. According to BizBuySell’s December 2016 business broker survey, nearly 60 percent of brokers believe President Trump’s policies will encourage more buyers to enter the market.

Digging deeper into recent transaction activity, the top small businesses bought and sold were retail, including restaurants, which accounted for 43 percent. The service sector was the second most popular type of business, followed by manufacturing businesses and internet related businesses. California leads the pack for buying or selling a small business, with the most small business transactions in the U.S., followed by Florida, New York and Texas.

According to BizBuySell’s 2016 demographic study, small business buyers and sellers are predominately Caucasian, college-educated, married men, approximately 40-50 years old. Yet, 49 percent of younger buyers identify as a minority. The study also revealed that the top motivator for buying a business is the chance to be your own boss, and nearly half of small business sellers plan to exit their business in the next five years.

BizBuySell Infographic 2016 - Why Buying or Selling a Business is Becoming a Big Deal

Click picture to download Infographic on Buying or Selling a Small Business

6 Comments on Infographic: Why Buying or Selling a Small Business is Becoming a Big Deal

  1. This article describes perfectly what is happening, but I may highlight the following:
    – if the manufacturing businesses were in the lead, then we could discuss about truly better economic conditions and an economic environment.
    – the economic sentiment and the business sentiment indexes are indeed improving, we see this the best on recent bullish stock market.
    – and before we get a conclusion, we must see that all the percent improvements are in the error range, so I will not hurry to say we’re all good.
    I do not want to spoil your good mood 🙂

  2. Average sale price is not a credible metric to claim higher values. It doesn’t necessarily represent higher values (that would be represented by higher multiples).

  3. I’m curious where seller notes fit in to sources of financing.

    • The BizBuySell Team // February 24, 2017 at 10:25 am // Reply

      30 percent of businesses listed for sale on BizBuySell offer seller financing, yet we cannot confirm how many of these were sold businesses using seller financing. It’s also worth noting that businesses listed for sale offering seller financing receive 14 percent more leads on average.

  4. Thank you for sharing this useful information. Well, buying or selling a small business is becoming a big deal for anyone. So above given ideas are really helpful while dealing with small business.

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