- February 1, 2025
- Posted by: Business Brokers & Consultants
- Category: Seller Articles
When it comes to buying or selling a business, two common questions often arise: “How many businesses are for sale?” and “What percentage of businesses actually sell?”
To answer these questions, it’s important to break down the market by industry. Most small to mid-sized business sales are concentrated in sectors like manufacturing, wholesale trade, retail trade, business and personal services, and household/miscellaneous services. Together, these industries make up a significant portion of the estimated 30 million businesses in the U.S.
Generally, around 15-20% of small businesses are for sale at any given time, though this can fluctuate depending on market conditions. Smaller businesses, particularly those with fewer than four employees, account for a large share of businesses on the market. However, smaller businesses typically face lower success rates when it comes to selling. This is often due to challenges like incomplete financial records or unrealistic pricing, which can make it difficult to close a deal.
So, why do smaller businesses struggle more than larger ones? There are several factors at play. Smaller businesses often deal with issues like poor financial records, overestimated asking prices, and owners who are not fully committed to selling. Some business owners may also be unprepared for the complexities of the sales process, and in certain cases, they may simply choose to close their doors instead of selling.
One of the main reasons smaller businesses fail to sell is a lack of preparation. Many small business owners, especially those with fewer than five employees, don’t plan ahead for a sale. This lack of preparation can include outdated financial records, unresolved legal issues, and inefficiencies in business operations. Buyers may perceive these issues as red flags and walk away, even if the asking price seems reasonable.
To improve their chances of a successful sale, business owners should take a few proactive steps. First, it’s crucial to clean up financial records and ensure they are accurate and up-to-date. It’s also a good idea to seek professional help for expert advice, market insights, and business valuation. Lastly, business owners should work on making their business more attractive by demonstrating stability, profitability, and growth potential. Taking these steps can significantly improve the likelihood of a successful sale.
Copyright: Business Brokerage Press, Inc.
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