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Facts / Figures Regarding Business Transactions.

  • According to the SBA, there are about 1,000,000 businesses on the market at anytime
  • Typically there are more than 4,000,000 potential buyers seeking to buy a business.
  • The “Private Equity Overhang” is significantly impacting and increasing the valuation of private companies. According to “Pitchbook” a leading research company there is over $328 Billion of private investment capital ready for acquisitions
  • Interest rates remain historically low. When interest rates are low, buyers can finance acquisitions more inexpensively, which effectively increases the value of a business.
  • The baby boomer effect has had a significant impact on business sales on both sides of the equation. An estimated 15 million baby boomer businesses will change hands in the next decade.
  • The larger the sales volume and number of employees, the likelier a business is to sell.
  • Virtually all sales involving third party financing must have an independent valuation.
  • The proposed increase of Estate and Capital Gains taxes will significantly impact the owners of private companies

Why Businesses Don’t Sell

  • The business is too dependent upon the current owner or management team
  • Asking price is too high
  • Poor financial statements and/or disorganized legal ownership documentation
  • Dependent on a single customer (or a handful of customers)
  • Lack of customer contracts or supplier contracts
  • Lack of employment contracts, non-competes or non-solicitation agreements
  • Significant liability exposure
  • Outdated inventory and unprofitable products and/or services
  • Inefficient employee staffing
  • Undefined business processes
  • Inconsistent earnings/revenues
  • Misrepresented or omitted information
  • Skeletons