Mae Anderson, Associated Press
10 minutes ago
FILE – Shoppers walk in front of a store, November 18, 2020, in Pembroke Pines, Florida. Small business acquisition rates rose and fell in 2023, reflecting rising interest rates that put a damper on the market. (AP Photo/Marta Lavandia)
NEW YORK (AP) — Is it a good time to sell a small business, or maybe buy one?
Small business acquisitions rose and fell in 2023, reflecting rising interest rates that cooled the market.
But a strong fourth quarter could bode well for 2024, helped by signals from the Federal Reserve that rate hikes are complete.
Overall, the number of small business acquisitions remained largely unchanged in 2023, according to Insight Data from business marketplace BizBuySell, which tracks and analyzes U.S. business transactions.
A total of 9,093 companies were reported sold on BizBuySell in 2023, an increase of less than 1% compared to 9,054 companies sold in 2022. Transaction value increased from $6.3 billion to $6.5 billion. Quarterly results show clear changes in the market. Volumes fell 10% in the first quarter, remained flat in the second and third quarters as the pace of rate hikes slowed, and rose 12% in the fourth amid news of slowing inflation and possible rate cuts. increased. .
So as long as business is strong, now could be a good time to buy.
“If a business has a good return on investment and has the ability to service its debt, it may be a good time to buy, regardless of interest rates,” said Ken Bohenek, a business broker with Murphy Business Sales in northern Idaho. is high,” he said. “Then when interest rates soften, you're likely to be in a much better position with cash flow than someone who bought when money was cheap and interest rates rose quickly.”
