BizBuySell, the largest internet business for sale listing site reports that entrepreneurs found it easier to sell their business in 2010 but they probably sold for a lower price. The number of U.S. small businesses sold, as reported by business brokers, on online small business marketplace BizBuySell.com increased 3% in 2010 compared to a year earlier. But the median price of small businesses that sold fell 6.3%, to $150,000 from $160,000 the year prior, according to BizBuySell. Key valuation metrics also fell slightly with the average revenue multiple down 2.1% and the average cash flow multiple down 0.6%.
“In 2010, we saw more deals getting done,” said Mike Handelsman, group general manager of BizBuySell.com, in a written statement. “One of the key drivers for that growth was that business sellers were more realistic about their business valuations.”
“While access to financing for business acquisitions began to loosen up in the second half of 2010, it remains difficult for many business buyers to get the financing necessary to purchase a company,” Handelsman said.
That’s one reason small businesses sold for less in 2010, he said.
Looking forward, BizBuySell expects more small businesses to be sold in 2011 as the economy recovers and baby boomers look to cash out before retirement.
Banks loosening credit will be key to business sales picking up steam. ”It’s very simple,” said Handelsman. “When credit is more readily available, the wheels of business succession will start to turn again. Until then, we can expect a moderate recovery in the business-for-sale marketplace.”
What is the take away for child care owners? If you want to sell your child care business in 2011 it will need to be priced correctly. And, financing will remain tight so be prepared to provide some owner financing to get the deal done.
Donna S. Dailey
Solutions4ChildCare
“Helping People Buy and Sell Child Care Businesses” – If you are thinking about selling your child care business in 2011, give us a call – free initial consultation – no obligation – confidential. 336-617-3181
About Donna Dailey
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