Current Trends in the Small Business Market for Fall 2018

Overview of Small Business Marketing Trends

There are many things to consider when deciding to when to sell your business and whether to buy a business. I am often asked about the current health, trends and activities in the private business market. I am happy to say the consensus is we are in a healthy business economy for small businesses. My assessment of the major trends from a variety of business sources for the first half of 2018 is as follows:

The Positive:

• Private business owners are highly optimistic about the economy and earnings are spiking to their highest level in decades.
• Business owners are still investing and spending conservatively, however many are looking to expand through acquisition.
• The individual business buyer market is healthy with a growing percentage of people leaving the corporate work force, seeking to buy or start their own business.
• There is a great amount of private investment capital looking for good businesses to purchase starting in the lower middle market tier (minimum revenue around $5 million).
• Private business sales activity appears to support this favorable climate with an 8% increase in businesses deals being closed in the first half of 2018, versus the same period in 2017.

The Negative:

• Buyers and Business owners alike are concerned about rising interest rates and the risk that the credit market may tighten, making acquisitions more expensive.
• The low unemployment rate increases the difficulty for business owners of finding qualified employees and may drive wage and cost increases, and for some businesses may slow growth opportunities.
• Business owners are keeping a close eye on tariffs but for now they are not seeing “trade wars” affecting their businesses so this factor should not affect buyers’ confidence.

 Summary

It remains a strong market from a timing standpoint for both buyers and sellers, as buyers are active, capital and credit are available, revenue and profit are trending positive, and interest rates are relatively low.

If you are thinking of selling your business, we can help you determine the value of your business and explain the steps in the sales process. If you are looking to buy a business, we can help you clarify your purchase objectives and evaluate your capability as a buyer. We are experts at buying and selling private businesses. We do not charge for these initial consultative services.