Sales of Small Firms Are Up
But Gain in 2nd Period Reflects Owner's Realization Businesses are Worth Less
By Sarah Needleman
Wall Street Journal, July 14, 2011
More small business owners sold their companies in the second quarter, but there's gloom surrounding the transactions.
Sales of businesses with roughly $350,000 in annual revenue rose 8% from a year earlier, reports BizBuySell.com, an online marketplace for small-business acquisitions in San Francisco. The increase marks the third year-over-year quarterly gain in a row, with brokers nationwide reporting similar gains.
Yet the growth isn't indicative of significant improvements in business performance or banklending volume. Instead, main driving force is the acceptance among owners that their businesses are no longer worth what they once were. Many sellers cut their asking prices and agreed to finance a significant portion of the deals themselves.
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