Market confidence among both buyers and sellers of businesses dropped slightly in 2017 compared to 2016, according to BizBuySell.com, the online business-for-sale marketplace. Its 2017 Seller Confidence Index dropped slightly from 59 last year to 58 this year while its 2017 Buyer index dropped more significantly, to 46 (in 2017) from 49 (in 2016).
The Buyer-Seller Confidence Index is calculated by surveying 2,000 active buyers or sellers of a small business. Scores range from 0 to 100.
100 | Represents signifies a belief that it’s a perfect environment for buying or selling a business
50 | Represents neutral confidence
Overview of seller confidence
The slight drop in seller confidence doesn’t diminish the overall positivity that has persisted since BizBuySell started calculating this data in 2013.
60% | Percent of current owners who believe they would receive a price that met their expectations if they sold their business today.
40% | Believe the selling environment has improved during past year and that they could receive a higher sales price than during the previous year (2016). Among these confident respondents, they base their optimism on these factors:
62% | Improving sales and revenue
43% | Improving small business economy
25% | Increased interest in their business industry
7% | Percentage increase in the number of businesses-for-sale listings over last year (2016)
4.4% | Percentage increase in the revenue of businesses for sale listings (year-over-year)
3% | Percentage increase in the cash flow of businesses for sale listing (year-over-year)
5.9% | Percentage increase in the median asking price of businesses for sale listing (year-over-year)
But has the marketplace peaked?
While owners are optimistic in today’s market, there are indications of concern that the marketplace may soon “peak.”
41% | Percentage of owners who believe their business will be more valuable next year (compared to 48% in 2016)
47% | Percentage of owners who believe their business will not increase in value between now and next year (compared to 40% in 2016)
30% | Percentage of owners who believe their business value decreased.