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If you have ever thought of buying or selling a small business or franchise, now is a good time to do so. The number of small businesses bought and sold has continued to rise steadily.
According BizBuySell.com’s Q4 2016 Insight Report, small business transactions reached record highs in 2016, exceeding 2015’s annual totals by 8.6 percent and 2014’s previous high by 4.6 percent.
BizBuySell Q4 2016 Insight Report
BizBuySell, one of the internet’s premier business and franchise for-sale marketplaces, aggregates data from transactions reported by participating business brokers across the United States. The findings are published each quarter in its annual Insight Reports.
Last year a total of 7,842 small businesses were sold, the highest reported yearly sales total since BizBuySell started tracking transactions in 2007. The median revenue of sold businesses increased 5.2 percent from $449,462 in 2015 to $472,798 in 2016. Median cash flow also grew, up to $107,551 in 2016 from $102,000 the previous year.
Meanwhile, the median asking price remained flat from 2015 at $225,000, while the median sale price increased by half a percentage point to $200,000. As transactions picked up in the last quarter, the time it took for a small business to sell dropped to 160 days, representing an 11.6 percent drop from Q4 2015.
These figures confirm the positive assessment of the 2016 small business market becoming more balanced in terms of fair market value. More small businesses are expected to change hands as more Baby Boomers look to exit small business ownership for retirement and capitalize on the strong market.
“After several years of strong business-for-sale activity, it is great to see even more growth in 2016,” Bob House, President of BizBuySell.com, said in a press statement.