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Issue Date: Vol. 54, No. 2, February 2014, Posted On: 2/4/2014

Small Businesses Change Hands At Rapid Rate, Restaurants And Retail Leading the Way

Hank Schlesinger
TAGS: small business news, vending business, coin machine business, online business marketplace, route operators, Curtis Kroeker

SAN FRANCISCO -- A new report from the online business marketplace BizBuySell may have some impact on route operators. Transactions in which small businesses changed ownership grew some 49% in 2013, according to the report. More than 7,000 businesses were sold in 2013, compared with fewer than 5,000 for the previous year. The numbers, which were reported by brokers to BizBuySell, represent the first significant jump since such transactions reached a low in 2009.

Although the news may be taken as a cheerful sign of a recovering economy, for operators dependent on street locations it might signal increased turnover in management. Also notable in BizBuySell's statistics is that the increased numbers were led by restaurant transactions with a spike of 78% and retail that jumped a very healthy 71%.

"This year was the year of recovery that everyone has been waiting for since the September 2008 Financial Crisis," Curtis Kroeker, group general manager at BizBuySell.com and BizQuest.com, said. "After the onset of the Great Recession, transaction activity fell sharply until mid-2009 and then bumped along without meaningful growth. This created pent-up supply and demand that needed the right economic and capital conditions to materialize. In 2013, those conditions finally came together, resulting in a large increase in business transactions and contributing to a healthier small business environment, overall."

The dramatic increase, according to the firm's analysis, can be attributed to multiple factors, including the improving economy, strong supply and demand fundamentals (i.e., an aging business owner demographic and an increase in the number of qualified business buyers) and continued improvement in small business financial performance.

The upward trend is also one that the company sees continuing through 2014. The firm reported a strong fourth quarter to end 2013, with total small business transactions up 38% over the fourth quarter of 2012. This follows 56% growth in Q1 of 2013, 62% in Q2 and 42% in Q3.

For route operators, this could mean forming new relationships, as well as negotiating new contracts.

Topic: Small Business News

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