2018 was definitely a good year for the business sector.
According to a report by BizBuySell, 2018 experienced a new high in terms of business buying and selling. The report said for a three-year run, 2018 has the highest, with a total of 10,312 sold businesses for the fantastic year. If compared to 2017’s 9,919 and 2016’s businesses sold, last year’s record was 4 per cent and 32 per cent, respectively. In spite of a price spike for small businesses, the data shows there is no denying that the past three years was a wonderful year for both business buyers and sellers.
Looking at the data, the insight report said the average revenue of sold business increased from $500,000 in 2017 to $531,653 in 2018, while other businesses being sold had increased cash flow of $115,000 in 2017 to $120,000 in 2018, which is 4.3 per cent higher. According to the company, the data shown were the highest financial performance of sold businesses — and take note that this record is the highest so far as the BizBuySell started to track data.
On the other hand, the pricing also showed optimistic data. Small business owners were able to ask and receive more than before. This means that the middle price of the small business increased to $275,000 or 10 per cent higher; hence, increasing the sale price.
Bob House, President of BizBuySell.com and BizQuest.com, said the reason for the increase in numbers is due to the confidence of the people who want to be the boss of their own business, which was strongly influenced by the strong economy. Aside from confidence, these people strongly clung to the belief the strong economy will continue to become strong; hence the business buying and selling.
“We expect continued strong deal flow, but both buyers and sellers should also keep a close eye on factors that could affect the marketplace such as political gridlock, potential tariff impacts, rising interest rates, and stock market volatility. Those can be good indicators of how the market could shift moving forward,” House warned.
With the optimism surrounding 2018, one can conclude that 2019 can also be rose-coloured. But a business buyer or seller should still heed the advice of House and become alert to the sudden changes in the market. If you’re a new individual who wants to Buy and Sell Businesses in Australia, National Brokers Network’s real estate agents can help you understand the changes in the market and its impact on buying and selling.