Sales at small businesses languished last year, held back by tepid consumer demand.
Sales of small businesses, on the other hand, are booming.
More than 7,000 small firms changed hands in 2013, up nearly 50 percent from the roughly 4,700 that brokers reported the year before, according to a new report by BizBuySell, an online marketplace that connects small-business sellers with potential buyers. It is the fastest pace of business turnover since the recession began in 2008.
The increase was spearheaded by accelerated turnover in the retail and restaurant sectors, in which sales surged 71 percent and 78 percent, respectively.
“This year was the year of recovery that everyone has been waiting for” since the economic collapse, Curtis Kroeker, BizBuySell’s Group GM, said in a statement. He noted that the slump in transactions from the past few years resulted in “pent-up supply and demand that needed the right economic and capital conditions to materialize.”
“In 2013, those conditions finally came together resulting in a large increase in business transactions and contributing to a healthier small business environment overall.”
In part, that’s because the economy has started to improve, albeit slowly, leaving more potential buyers with the capital necessary to purchase a company. Additionally, more baby boomer entrepreneurs are retiring and looking to sell their firms.
Neither of those trends are expected to reverse course anytime soon. In fact, three of four brokers surveyed by BizBuySell expect small business sales by baby boomers to continue to increase next year — and as a result, Kroeker expects another overall increase in 2014.
“While we certainly are not completely out of the woods, the business-for-sale market is trending in the right direction and should continue on this path,” he said, though he does not expect the number this year to match the year-over-year surge posted in 2013.
“Simply put, the fundamentals are right for sustained transaction strength,” he said
It’s the latest sign that the year ahead may finally bring the sustained recovery many small business owners were hoping would take hold last year.
In December, hiring by small companies reached its fastest pace since 2006, according to the National Federation of Independent Business, while the group’s latest optimism index, released Tuesday, edged up during the final month of the year. Meanwhile, 86 percent of small business owners who responded to a new poll by The Hartford said they believe their firms will be successful this year.