Small Business Buyers Include More Women, Minorities

By Nathan Eddy  |  Posted 2014-02-03

A new group of younger and more diverse small business buyers has entered the business-for-sale market, according to a BizBuySell study, which surveyed more than 2,000 buyers and sellers.

The report, which looks into the pool of prospective buyers and sellers to learn more about the individuals who are buying and selling in today’s small business market, found the small business transaction market grew substantially in 2013, ending the year with sales up 49 percent over 2012 transaction volumes.

The study found that young buyers tend to be much more racially diverse than older buyers. Among buyers 65 and older, 87 percent identified as Caucasian—a number that declined significantly as the age of buyers decreased.

Caucasians represented 78 percent of those 50-64 year olds, 66 percent of 30-49 year olds and just 48 percent of 18-29 year olds interested in buying a business, according to the report.

In addition to the increased diversity among young buyers, the study revealed a bump in the number of women who are interested in business ownership.

Although the business-for-sale market is still a male-dominated world with men comprising 81 percent of all buyers, more young women appear interested in purchasing a small business.

While women represented just 9 percent of buyers over 65 years old, buying activity for female buyers was much higher in younger age brackets, 19 percent of 50-64 year olds, 20 percent of 30-49 year olds and 23 percent of 18-29 year olds.

While the recession delayed retirement plans for many business owners, it appears those owners are now feeling more confident about the market and are ready to sell.

Survey results suggested that rather than hold on to their businesses any longer, 97 percent of owners 65 and older indicated that they plan on selling in the next five years.

When asked for an expected timeline, 57 percent of respondents over 65 expected to exit their business within six months and 81 percent intend to sell within a year.

Fifty-six percent of 18-29 year olds and 58 percent of 30-49 year olds planned on redirecting their efforts toward another venture. Another 22 percent of 18-29 year olds and 15 percent of 30-49 year olds said sale proceeds would be used to purchase another small business.

Finally, 11 percent and 14 percent, respectively, for the two younger age groups, say they would return to full-time employment. More than three-quarters (76 percent) of the older business owners who intend to sell noted that they plan on retiring after the sale.

Eleven percent said they would focus on another business venture. In contrast, responses from younger sellers suggest they are much more likely to either reinvest sale proceeds into another venture or simply take the money and find a full-time job.

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