After a year that saw the market for buying and selling businesses improve, brokers are predicting even bigger gains in 2013, a new study finds.
Research from BizBuySell.com revealed that more than 45 percent of business brokers expect the market to grow slightly next year, while another 11 percent were even more optimistic, predicting business-for-sale transactions will improve greatly.
The top reason for the optimism in the survey is the increasing number of business owners looking to sell their companies. Other factors spurring the business-for-sale marketplace include more realistic asking prices from sellers, an increasing number of interested buyers and an improving small business environment.
"The challenging operating and financial environments of the past few years have dampened small business transaction volume," said Curtis Kroeker, general manager of BizBuySell.com. "As a result, there is latent supply of small business owners at or nearing retirement age who want to sell and would-be entrepreneurs ready to take the reins."
The improved conditions this year are another reason for the optimism. More the 60 percent of the brokers surveyed believe the business-for-sale market improved in 2012, with an increasing number of interested buyers in the market as the No. 1 factor helping close transactions.
"The brokers’ positive sentiment toward 2012 reflects a general trend we’ve seen in the business-for-sale marketplace since hitting bottom in 2009," Kroeker said. "Overall, there has been a slow, but steady improvement as buyers and sellers continue to find ways to get more deals done despite challenging operating and financing environments."
However, not everyone has a bright outlook on the year to come.
More than 40 percent of brokers are expecting either no change or worsening business-for-sale conditions in the coming year, with most citing the challenging small business environment as the top factor preventing transactions.
Whether they have a bright outlook or not, most brokers agree conditions will not return to pre-recession levels any time soon. The research shows that 56 percent of brokers believe it will take more than two years for business transactions to reach those levels, while another 14 percent think such transaction volumes will never return.
Kroeker said that while there is reason for optimism going forward, there are still many unresolved issues in the small business community and the national economy in general.
"As in years past, the best thing small business buyers and sellers can do is research, prepare and get creative in order to get deals done and move forward," he said. "Eventually, entrepreneurs will be the force that restores strength to the U.S. economy."
The study was based on surveys of nearly 5,000 business brokers throughout the U.S.