Written by The Business Journal Staff
The market for buying and selling businesses softened a bit in the Central Valley in 2018, according to new data from BizBuySell, an online business-for-sale marketplace.
The company reported 13 sold businesses in the Fresno area last year, down 7 percent from last year. The median sale price for those businesses was $79,000, which was also down 64.1 percent.
The purchased businesses had median revenue of $110,000 (down 83.3 percent) and median cash flow of $98,000 (down 54.8 percent).
BizBuySell compiled the closed transactions from reports from representing brokers. Not all closed transactions are reported to BizBuySell.
Among the examples of businesses that were purchased in the area last year include a Fresno-area family medical clinic that sold for $250,000, a senior placement franchise that went for $79,000 and a north Hanford pool service route that sold for $32,400.
According to BizBuySell’s annual Insight Report, 2018 marked the third year in a row for record numbers of small businesses changing hands. A total of 10,312 businesses were reported sold nationwide last year, a 4 percent increase over the previous record of 9,919 in 2017 and a 31 percent jump from 2016’s then high of 7,842.
According to a survey of brokers and small business owners in the market, brokers said they saw similar increases, with 65 percent of respondents reporting that their transaction activity increased in 2018 while another 21 percent said it remained similar to 2017’s active level.
When asked why they believed the business-for-sale market has remained hot, brokers credited an increasing number of buyers and sellers and the general improvement of the small business environment. Similarly, current small business owners credited the same factors as the reason for transaction growth.
“I think our society as a whole has put more emphasis on small businesses and has made the pathway to business ownership easier to see for first-time entrepreneurs, which is great as the market continues to perform well,” said one surveyed owner.
When asked why more listings were hitting the market in 2018, exactly half of current owners cited the growing Baby Boomer population that is now ready to retire. Another 34 percent believed owners did not want to manage rising minimum wage and health care costs while 32 percent said owners are motivated to sell based on concerns over upcoming economic or political regulations.