The number of small businesses listed for sale nationwide is at a six-year high, according to data compiled by BizBuySell.com, an online marketplace. The tally of completed transactions is also rising, and the median sale price is up 12 percent compared with prices a year ago.
Businesses are sold for a wide variety of reasons, and America’s improving economy is the largest factor in the recent rise, according to those in the industry. But bankers and brokers say there is a significant increase in sales from business owners in their 60s and 70s who are ready to turn their creations over to a new generation of owners.
“We’re seeing the most sales activity we have in decades, and a high percentage are baby boomers,” said Ken Connell, the business banking sales director at Huntington Bank in Columbus, Ohio. “For many small-business owners, that’s their retirement. All of their wealth is in the business.”
Lynn G. Ozer, the president of government-guaranteed lending atSusquehanna Bank in Lititz, Pa., said pent-up demand was contributing to this year’s surge.
“Baby boomers who were going to sell got stopped in their tracks in 2008, 2009 and 2010,” she said. “Things froze for a few years, then got better. In 2012, 2013 and 2014, they put together great years. Now, their books look good and they’re ready.”
Chronology and demographics are also a factor. “The ’90s were a very good decade, so a lot of businesses got launched,” Mr. Connell said. “A lot of business owners were in their 40s. Now, it’s 20 years later and they’re at retirement age. A lot of this is just timing.”
Brokers say they expect the wave of baby boomer sales to crest over the next few years. Steven D. Zimmerman, the owner of Restaurant Realty in San Rafael, Calif., said that even those who were reluctant to sell were keeping an eye on the economic trends — and on their own physical limits.
“Some of the baby boomers we deal with have no choice,” he said. “The business is just so demanding that they can’t do it anymore.”
For those who decide to put their business on the market, the pool of potential buyers is the largest it has been in years, brokers say. Mr. Merry said the shoppers he works with tend to fall into two categories: companies making strategic acquisitions to fill out their business portfolios and individual buyers leaving corporate careers.
Original artical: NYT