Business For Sale Transactions Rising | starglobaltribune.com

Business For Sale Transactions Rising | starglobaltribune.com

Tuesday, July 13th, 2010 | Posted by dejanb

Newly published economic information issued by BizBuySell.com suggests that things are looking up for the nation’s business brokers.

BizBuySell.com’s latest quarterly document indicates that the number of closed business-for-sale transactions in Second Quarter 2010 rose significantly, by 6.3 percent, as compared with the same time period in 2009.

“During the recent economic recession, it was difficult to sell a business because of weakened company financials & the dearth of credit available for new business acquisition,” notes Mike Handelsman, general manager of BizBuySell.com. “It’s encouraging to see the market rebounding this year. It is actually a pleasant time to list a business on the market.”

BizBuySell.com also reported an 8.5 percent increase in funds flow multiples year-over-year, with funds flow multiples on closed transactions averaging 2.8 in Second Quarter 2010.

Handelsman attributes rising valuation multiples to buyers’ strong regard for businesses that maintained positive funds flow in the work of the economic recession. “With lots of businesses having struggled in recent years, buyers are willing to bid up the pricing on those businesses that still have strong & stable funds flows,” commented Handelsman.

Chicago business broker Domenic Rinaldi cites another reason for rising valuation multiples, noting that seller financing is increasingly common in business-for-sale transactions. Because the business sellers are offering financing, they are taking on additional risk & so they ask for a higher business sale cost. “To me, that is a giant factor in rising valuation multiples,” said Rinaldi.

The median asking cost for a business on the BizBuySell.com site was $249,000 in the Second Quarter 2010. BizBuySell.com compiles its quarterly document on the business-for-sale marketplace using the business listings on its website, which constitutes the largest online marketplace for business buyers & sellers. It also receives information on closed sales from its business broker members. According to the company, over 90 percent of the country’s business brokers make their listings available on BizBuySell.com.

Tags: Business, business transactions