3 Things You Should Know About Small Business: Jan. 8
NEW YORK (TheStreet) -- What's happening in small business today?
1. Small firm M&A jumps in December. Business brokers ended 2012 on a high note as small-business owners across the country rushed to complete the sale of their businesses before the end of the year. Completed transactions of businesses for sale "spiked significantly" in the final three weeks of 2012 as the fiscal cliff deadline approached and higher taxes loomed, according to a report by BizBuySell.com, the Internet's largest business-for-sale marketplace.
The number of closed small-business transactions spiked more than 40% in the final three weeks of the year compared to the sales pace during the same period in the prior year, BizBuySell.com says.
"The dramatic bump in closed transactions over the final three weeks of 2012 really shows the effect that tax policy can have on business owners' motivation. Given the eight-plus months it typically takes to sell a business, the end-of-year increase comes from owners who put their business on the market months ago pushing to ink deals before the New Year," says Curtis Kroeker, BizBuySell.com's general manager.
The trend of improving small-business financials continued in 2012, laying a foundation for a more robust business-for-sale market in 2013, BizBuySell.com says. As small businesses grew healthier over the year, the median sale price rose 3.2% to $160,000 from $155,000.
"We've seen small-business financials improve consistently for a few years now, yet buyers aren't yet flocking to the market," Kroeker said. "With more owners finally planning their exits, this results in a buyer's market keeping sales multiples low. Accordingly, brokers have indicated that it's more important than ever for sellers to provide seller financing to get deals done."