Some Postive Signs in the Business For Sale Market

It appears that we are now getting regular doses of encouraging news on all fronts in the business for sale marketplace. While much of this data is skewered simply because it takes current figures compared to recent past dismal periods, nevertheless, at least we seem to be moving in the right direction.

My colleagues in the M & A world are starting to see very positive deal flow as well as an increase in the number of transactions. Whole there is a wealth of figures being tossed around, most of these are highly subjective and rarely quantifiable thus it does not make much sense to be quoting them as gospel. Most importantly however, is that the mega M & A market rarely translates to what is happening on Main Street.

In my opinion, the most significant piece to the puzzle for business buyers is the overall level of confidence they have in the near-term future. On this front, all signs point to a more positive outlook. It would be easy to allow major news events like the Goldman Sachs investigation, the massive fallout last week in the market, or the catastrophic fiscal events in Europe to derail one’s general confidence. But again, these issues will work themselves out and cannot be the basis for an individual business buyer to shy aware from present-day opportunities.

If you want to get worked up about a news event, focus on BPs disastrous spill in the Gulf of Mexico. That will impact many more small businesses for many more years than any of the events cited above, and I only hope that the media ramps up its pressure on BP to get that mess resolved and not let it find its way out of the news anytime soon.

Back to business buying and some positive signs. New job creation is up, foreclosures seem to be stabilizing and these two factors alone help any enterprising individual gain a bit of confidence in the overall marketplace. As well, many small businesses are seeing an increase in sales, profits and overall activity. While they are not back to the levels of a few years ago, it is far better that going backwards.

While signs may be headed the right way, we are in now way close to the point of a seller’s market like the past. The opportunities remain incredibly attractive for any serious prospective business buyer to negotiate highly favorable deal terms. At the same time, this increased confidence also litters the business for sale landscape with more people who think they want to buy a business and therefore the buyer pool gets a bit bigger. Competition between buyers has always enabled a seller’s market and while this is not the case right now, sellers may see more activity for their listings. That is specifically why it is so important for business buyers to be ready to submit offers and begin the process of serious discussions with a seller and eliminate all the “noise” that competing buyers may present.

Although there appears to be some light at the end of the economic tunnel, rest assured that qualified buyers are still in charge right now, so use it to your advantage when negotiating deal terms. Here is a very helpful article on negotiating deal terms when buying a business for sale

Comments

[News Online Blogs]

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[Defender Seller]

Buyer's market? That's what I like to hear! Buy now and stick to it. Recessions are the time to start a business and make it work lean and mean.

[BassSocorro23]

I had got a dream to make my own commerce, nevertheless I did not have got enough amount of cash to do that. Thank heaven my close fellow said to take the loans. Thence I received the short term loan and realized my dream.

[Kipp Krukowski]

I agree with your comments in regards to seeing positive deal flow in our three regional offices. Qualified buyers are in the driver's seat, especially in the case that they sense a highly motivated seller. Sellers are realizing that they will likely need the bank. Those that are not willing to do seller financing are being forced to hold onto their businesses.

[Business Broker in Toronto]

Getting deals done is certainly still challenging here in Canada but I can offer some anecdotal evidence that there seems to be more confidence in the market from buyers. The doom & gloom mentality is (slowly) starting to thaw in my opinion and people are more apt now to assume some business risk.