Small business sales pick up

By Catherine Clifford, staff reporter


NEW YORK (CNNMoney) -- Entrepreneurs trying to sell their businesses seem to have had an easier time of it last year, although they may not have gotten the price they wanted.

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, according to an annual report from the San Francisco-based firm.

But the median price of small businesses that sold fell 6.3%, to $150,000 from $160,000 the year prior, according to BizBuySell.

"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."

Smaller retail shops, restaurants or other service businesses powered much of the sales activity, according to BizBuySell. Manufacturing businesses -- which tend to be more expensive -- weren't sold as often.

"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.

Sales were particularly strong in the fourth quarter, jumping 11% vs. a year earlier. Buyers and sellers could have been motivated by uncertainty about changes in the tax code, according to BizBuySell.com. It wasn't until late mid-December that Congress passed a controversial tax cut bill.

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."

BizBuySell's 2010 report is based on data from 4568 transactions listed on its site, as reported by business brokers, and does not include businesses sold directly by owners.The site currently lists 45,000 businesses for sale nationwide, ranging from small home-based ventures to larger multimillion-dollar businesses. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Questions & Answers



QHow does a florist sell more in this economy? We changed our business to designing weddings and events only, as the everyday flowers are not selling. We had to throw out too much product at the end of the week -- flowers are perishable! More
Get Answer
- The Flower Lady, Suwanee, Ga.
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.04%4.13%
15 yr fixed3.04%3.09%
5/1 ARM3.22%3.22%
30 yr refi4.08%4.18%
15 yr refi3.11%3.16%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:

Sections

The Internet could be both villain and savior to Sony by giving it an option on how to release its controversial comedy. More

Fed chief Janet Yellen believes the steep drop in oil prices is a net positive for the U.S. economy More

Reddit made the unusual decision to take down a subreddit that housed hacked Sony Pictures materials. More

News startup The Skimm announced a new round of funding, 1 million active readers, and plans to expand into a 'lifestyle brand.' More

Congress waited until the last minute to decide what to do with a slew of expired tax breaks. They extended most of them, and a handful will affect individuals directly. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.