Small-Business Market Improving in 2013
While brokers had mostly positive feelings toward the business-for-sale market, they did see some hazards along the path to recovery.Most small-business brokers report an increase in both buyers and sellers on the market, resulting in a greater numbers of transactions, suggesting an improvement in the small-business market in the United States, according to a nationwide survey of business brokers conducted by BizBuySell, a Web-based marketplace for buying or selling small businesses. While brokers were mostly positive about the business-for-sale market, they did see some hazards along the path to recovery. When asked about the biggest factor endangering economic recovery, 31.8 percent cited national debt and ongoing political gridlock. Small-business and personal tax rates came in second with 17.5 percent of respondents, while both small-business health care costs and ongoing long-term unemployment received 12.3 percent of votes each. "Overall, there are certainly some hurdles that still need to be jumped, but it's very exciting that brokers are increasingly optimistic about both 2013 and beyond," Curtis Kroeker, general manager of BizBuySell, said in a statement. "With the uncertainty of the presidential election and [the threat of the] fiscal cliff behind us, there is reason to believe buyers and sellers will be more aggressive in the coming months and years." One issue nearly all brokers agreed on was the effect 2013 tax changes are having on small businesses. Of broker respondents, 76.5 percent believed tax changes are slightly deflating small-business values, and another 14.7 percent said they are greatly deflating values.
The report noted that while this means owners are being forced to accept lower sales prices, brokers believed this would actually help spur more transactions as buyers hope to get in at a good price. In fact, 26.2 percent of brokers that said they expect more transactions in 2013 attributed it to sellers' expectations becoming more realistic, improving sales prices.