Sales of Small Businesses Dip 5% in 2019
Q4 Closed Small Business Transactions

Sales of Small Businesses Dip 5% in 2019

It seems that fewer small businesses changed hands last year than in 2018. According to data from brokers reporting to the business listing site BizBuySell, 9,746 businesses were bought and sold in 2019 compared to 10,312 the year prior. That marks a year over year decrease of 5.5%, snapping a three-year streak of rising numbers. However it’s worth remembering that 2018 saw a record number of transactions, leaving 2019 at a still-historic high.

Quarter by quarter, 2019 saw the most transactions in Q1 with a total of 2,504. This is partially thanks to a relatively weak fourth quarter in 2018 that brought 2,288 transactions. In fact, each quarter in 2019 managed to top that Q4 2018 figure.

Much of the reason for the dip in business sales is being attributed to uncertainty. More specifically, it’s believed that concerns of tariffs, the big changes that could come with the 2020 presidential election, and the unknown future of the U.S. economy are giving some would-be small business owners pause. Speaking to the tariff issue, Franklin Transmission and Auto Care owner Richard Williams told BizBuySell, “The steel tariffs with China have increased my parts cost an average of 35%. This is reflective in my bottom line and it’s not like I can raise prices by 35%. It would cause me to go out of business.”

Meanwhile, with the United States enjoying the longest period of economic expansion ever, some may be wondering whether we’re nearing a peak. This may be motivating current owners to look for sellers, with Evolution Advisors co-founder Randy Hendershot explaining, “The topic of a potential economic downturn is coming up more and more in my conversations with sellers. Many of them have weathered the 2008 recession and are looking to sell before the next down cycle.”

Another potential factor is minimum wages. This year minimums are set to increase in 24 states, including 48 cities and counties across the country. Like with tariffs, some small business owners have seen these laws impact their expenses, leaving them to decide whether it’s worth raising their prices accordingly.

Commenting on the overall results, BizBuySell and BizQuest president Bob House said, “While there is definitely some uncertainty in the market, it’s good to see that 2019 transactions remained strong overall.” He continued, “Buyers and sellers are obviously still seeing value in today’s business-for-sale market and that momentum will likely continue well into 2020, even if levels plateau a bit due to economic and political concerns.”

Even with all of the uncertainties at play, 2019 was yet another great year for many small businesses. Additionally, with the economy off to a good start for 2020, there’s still plenty of optimism for the months ahead. Will that translate to more business changing hands? It may not make for another new record but, as House notes, it does seem to be set up for another historic high.

Leave a Reply

The "Email" field is empty, you must enter some text to proceed.The text you entered in the "Email" field appears to be invalid, please edit it and try again
Get the Latest News Delivered to Your Inbox

A Guide to Building Credit and Increasing Your Credit Scores

When it comes to credit, there’s some good news. The average credit score in the United States has been steadily rising in recent years, coming in at 715 in 2023. That may be because, today, consumers not only have more ways to access their credit reports and scores than ever before but also because there are an increasing number of options that Americans have for building credit in the first...

2024 SoFi Checking and Savings Review

Ever since I started taking an interest in the FinTech sector, one company whose name I’ve seen pop up over and over again is SoFi. Lately it seems as though that theme has been sent into overdrive as the company has not only become a household name thanks to its stadium naming rights deal but also because of the company’s continued product expansions. The most interesting development in my mind...
Chase Freedom Flex card

Chase Reveals Q2 2024 Freedom 5%(+) Bonus Categories

Chase has announced its bonus category picks for the second quarter of 2024 — including some interesting twists. About the categories: As April approaches, Chase has revealed what categories Freedom and Freedom Flex cardholders can earn bonuses on. From April 1st through June 30th, customers can earn 5% (or more) in three categories: Amazon.com, Hotels, and Restaurants. Similar to how Chase embraced a "New Year, New Me" theme last quarter,...

FedEx Announces Winners of 11th Annual 2023 Small Business Grant Contest

Nearly three months after the entry period ended, FedEx has announced the winners of its 11th annual Small Business Grant Content. This year's event saw more than $300,000 in funds going to a variety of small businesses across the nation. Last month, the company revealed 100 finalists, with that list now being narrowed down to just 10 winners. This year's grand prize winners included KindVR, The Cupcake Collection, Up In...
H-E-B and Central Market  credit cards

Imprint Launches Credit Cards from H-E-B and Central Market 

The FinTech Imprint is partnering with the popular Texas-based grocery chain H-E-B for a pair of new rewards credit cards. This week saw the launch of the H-E-B Visa Signature Credit Card as well as the Central Market Visa Signature Credit Card. With these two (nearly identical) options, customers will be able to earn rewards on groceries and beyond. First, both versions of the card earn up to 5% back on select...