According to the 2020 3rd quarter survey conducted by the IBBA, M&A Source, and Pepperdine University, Intermediaries are reporting that many businesses are selling closer to their asking price than in 2019. We believe that larger businesses, those less affected by Covid and those valued between $1MM and $5MM, saw increased Buyer competition which resulted in sales much closer to their asking price. Conversely, those businesses impacted by the Covid shutdowns, such as retail and restaurants, were less sought after and therefore sold at lower than their asking price.
What types of businesses are being purchased?
The top-selling types of businesses depend upon the size of the transaction. The top industry sectors in the $1-$50MM range were Construction, Business Services, Manufacturing, Wholesale, and Consumer Goods/Retail. Restaurants, not surprisingly, led the way in the under $500k range with Buyers finding opportunities in Asset Sales and lease assumptions to add locations.
Why are businesses being sold?
The number one reason owners state for selling their business is retirement, with owner burnout and new opportunities as secondary reasons. Some owners have decided that now is the time to sell rather than wait until the end of the pandemic, while others see more opportunity once the pandemic is resolved.
Considering selling your business?
Selling a business is a challenging yet rewarding experience. Today’s business for sale marketplace is more complex than years past. Standing out in the crowd to attract qualified buyers is the key to making a successful sale. Vanguard Resource Group, located in San Diego, has been helping business owners get top dollar for their businesses since 1989.
Our “secret” is hard work. When we represent a client, we do the hard, detailed work required well in advance of taking the company into the marketplace. We firmly believe that you only have one chance to make a good first impression on the Buyer, and that is where our up-front preparation makes the difference.
If you’re interested in selling your San Diego business, contact our business brokers today for more information. With years of experience selling thousands of businesses, we’re confident that our expertise can help you get the most from your business sale and shorten the time it takes to close a deal.