Health Care Costs Impact Small Business Sales
Around 20 percent of brokers said they’ve had a client sell their business due to higher health care costs, according to the BizBuySell survey.More than 20 percent of national business brokers have had a client sell their small business due to higher health care costs, according to a nationwide survey of business brokers conducted by BizBuySell, a marketplace for buying or selling small businesses. The survey also found 8 percent of surveyed brokers have had a client sell their business largely due to a minimum wage increase or potential minimum wage increase, a growing trend that is likely to be important for small business owners in 2016. More than 20 percent of surveyed brokers said they’ve had a client sell their business due to higher health care costs, which the report said would be an issue to watch in 2016, especially considering that a new Affordable Care Act mandate for companies with 50 or more employees will take effect in January. "It's likely that some owners will see high heath care costs as a reason to sell, but I think the percentage selling because of these costs will remain similar over time," Bob House, group general manager of BizBuySell and BizQuest, told eWEEK. "Owners will certainly take the time to find out how much health care costs are affecting their bottom line and make a decision based on those numbers. Overall, however, the majority of small business owners have a variety of reasons to sell, so health care costs will rarely be the lone cause."
Brokers in the Northwest, where cities like San Francisco and Seattle recently upped the minimum wage to $15 an hour, were the most likely to have seen sellers exit due to wage rates.