Trend: Small Businesses Change Hands

Small businesses are being sold more frequently than in the past. Statistically, on any given day, 1.7 Million small businesses are for sale in the United States. Yet, business brokers report that in many industries there are more buyers than sellers.

In the past, the vast majority of small business owners either started their companies or inherited them. The way in which small business ownership comes about is changing.

The trend of purchasing existing small businesses will be driven in part by older workers who have left corporate America (see the Graying of Small Business trend). Fortified by stock options, retirement buyouts, and severance packages, many will prefer to keep working as their own boss.

A thriving market for the sale of small businesses will help grow their total number. There will always be those who start from scratch, just as there will always be businesses that make it into second- and third-generation hands.

But a healthy market for the sale of small businesses will give owners additional exit-strategy options. Businesses that might have withered or have been absorbed by competitors will be sold to people who will bring new energy and in many instances new capital.

Service providers who assist in putting together buyers and sellers, such as business brokers and M&A firms, will find good times ahead. More M&A activity will also mean more business for lawyers, bankers, consultants, and others who help make sales happen.

For vendors, service providers, and market partners, businesses changing hands will mean a shifting landscape. A carefully constructed relationship has no guarantee of surviving when a new owner takes over. Relationships well become a constant concern that require more time and resources.
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