Why 2023 is the best year to sell your business

Great news: The market odds are in your favor and the tides are not turning anytime soon.

8,647 small businesses in the United States like yours were sold in 2021 alone, up from 7,612 closed transactions in 2020, and analysts are optimistic these numbers will grow this year.

After holding off during the height of the pandemic, private equity and investors are flush with cash and looking to acquire small businesses.

If your business is in the HVAC, plumbing, landscaping, or electrical sector, you are in luck this 2023.

Businesses in the services sector came in first place as the top preference for buyers when looking for a business to acquire according to BizBuySell’s 2022 Small Business Survey with restaurants and wholesale retailers trailing at second and third place.

Here are 3 reasons why it might be time to sell your business in 2022.

1. Small businesses are selling at record prices

Buyers have become more willing to pay premium prices to acquire businesses that are performing well. Sale prices across the board hit a record median of $350,000 in the third quarter of 2021.*

In particular, HVAC businesses sold for a median of $575,000; plumbing businesses for $452,000; landscaping businesses for $456,000 and electrical contracting businesses for $1,000,000.*

60% of buyers according to BizBuySell’s 2022 Small Business Survey cited strong finances and profits as a requirement in searching for a business to acquire.

2. More and more Americans are looking to become small business owners

Many Americans are choosing to ditch their corporate 9-to-5s in order to bet on themselves and be their own bosses. Over 5 million new small businesses have already been registered in the United States from January to November 2021 alone, the largest figure recorded by the U.S. Census Bureau.

Some opt not to start from scratch and are looking to take over from owners retiring or exiting from their businesses. A survey of brokers in the United States indicated that 23% of people inquiring about business listings and sales are newly-resigned refugees from the American corporate world.

3. It’s still a sellers’ market

There are significantly more small business owners expected to put up their businesses for sale this year due to the wave of Baby Boomer owners retiring. Other owners have also started to put up their businesses for sale due to pandemic burnout and labor shortage.

Yet, there are still too few quality businesses able to meet growing demand from sellers.

Businesses in the second half of 2021 sold for higher multiples than any time period in recent memory. Interest rates are still low at the moment. An increase in business sales activity has also been spurred by Small Business Administration giving incentives and discounts for borrowers, especially for transactions under $5 million.

If you want to weigh your odds and discuss selling your business, you can reach out through the contact form below