The online business-for-sale marketplace BizBuySell.com reported today (July 10, 2018) that a record number of small businesses changed hands in the first half of 2018.

5,383 | Number of businesses reported sold in the first two quarters of 2018 (on pace to surpass 2017’s record-high of 9,919 transactions)

2,705 | Number of businesses that changed hands in Q2, an increase of 6.7% over the same time last year (most of any quarter since BizBuySell began tracking data in 2007)

$526,048 | Median revenue of businesses sold in the second quarter reached (7.5% increase from 2017, a record high)

+$260,000 | Asking price increase (4%) over last year


 

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Closed Small Business Transactions (2015-2018 trend)


 

Small Business Sale Price vs. Asking Price (2015-2018 Trend)

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Small Business Sold by Business Sector (Q2, 2018)

 


Indicators point to continued strong pace in second half of 2018, however…

According to BizBuySell.com, the rising financial performance of small businesses and the influx of sellers ready to enter the market provide for an optimistic outlook of the rest of 2018. Sellers will continue to take advantage of high sale prices and buyers will be able to find quality businesses within the large supply of listings.

Despite the favorable setup, BizBuySell says “external factors exist that could sway the trajectory of the market.”

  • It remains to be seen what impact changes to the U.S. immigration policy will have on the market over the long term.
  • Same goes for the U.S.-China trade war, where tariffs could have a direct effect on small businesses.

However, on the upside

  • Tax Cuts and Jobs Act passed in 2017 could cause the number of business transactions to further spike. Under the new tax law, many owners now benefit from a 20 percent deduction for qualified business income. If owners choose to reinvest those savings back into their business as early data suggests, the end result could be an increasing number of attractive businesses hitting the market.

“Our survey indicated 32 percent of all current small business owners plan to sell in the next two years so this trend will likely continue well into the future,” BizBuzSell.com’s CEO Bob House said. “It will be particularly interesting to watch the demographics of an average small business owner change and how this younger generation’s new ideas will push forward an already successful small business environment.”

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Charts | BizBuySale.com