Another good sign for the economy. ?This post taken from the Business Journal?.
Here?s another sign that an economic upswing is taking hold: Business owners are finding it easier to sell their companies.
The number of U.S. businesses sold in 2012?s first quarter was 3.9 percent higher than during the same period a year ago, according to BizBuySell.com, which collects data from business brokers across the country.
BizBuySell reported the sales of 1,729 businesses in January, February and March 2012.
The number of transactions was the?largest in any quarter since the final three months?of 2008. The recession officially began in December 2007 and reached its worst levels in 2008 and 2009.
But this increased activity came with a price ? more specifically, a slight decrease in price.
The median sales price for business transactions actually dropped during the past year ? from $155,000 in the first quarter of 2011 to $150,000 in the same quarter this year.
And the same trend is evident when prices are compared to revenues and cash flow. Buyers typically paid 2.48 times cash flow for businesses a year ago, a multiple that dropped to 2.36 times cash flow during the most recent quarter.
So which trend will prove to be more significant ? higher sales or declining prices?
BizBuySell opts for the former. Its quarterly analysis suggests that business owners are gaining confidence that their companies are healthy enough to sell, even if the yield may a bit lower than they might have hoped.
?There are certainly small business owners who have been biding their time since the recession hit in 2008,? said BizBuySell?s group general manager,?Mike Handelsman, in a prepared statement. ?With better financing available for buyers and a larger supply of businesses ready to hit the market, we may finally have the right conditions for a more significant bump in the number of closed transactions.?
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