16 Feb The businesses-for-sale marketplace: a snapshot
Thousands of buyers and sellers have taken part in the latest BusinessesForSale.com quarterly survey. Respondents answered from more than 15 countries, including the UK, USA, Australia, Canada and South Africa. Over 70% of respondents were aged 42 and older, with 20% of those wanting to buy or sell a business being female. We outline some highlights below.
The survey reveals that although economic conditions may be biting – nearly a third surveyed have received a much worse than expected response from potential buyers – all is not doom and gloom, as around a fifth (21%) have received the level of interest they had expected and 21% have received more interest than predicted.
Sixteen percent of respondents believe that business sales are moderately undermined by buyers struggling to raise funding, with more than 14% believing this is having a significant effect. However, over 40% of sellers have not received any interest from serious buyers, a statistic which may suggest their businesses are overvalued, or they are not providing enough detail in their advertising material.
Asking price flexibility was also covered, with over a third of those surveyed happy to exercise moderate flexibility to generate a sale.
Lastly, over 30% of respondents use word-of-mouth as a way of advertising their business for sale, while 31% use other web-based resources and only 3% advertised their business for sale in trade press.
The most popular sector among prospective buyers was cafes and restaurants (being of interest to 34% of those polled), followed by food businesses (26.6%), franchise resales (20.9%) retail (20%) and hotel, guesthouses and B&Bs (21.9%). While some respondents were interested in just a single sector, many were browsing for several businesses, sometimes in highly disparate sectors.
Over 40% of buyers surveyed are prepared to buy a struggling business if it is realistically priced. Only 12.8% believe that ongoing economic turbulence influences their choice of sector.
Sellers were also asked how difficult they had found it to raise finance. Of those who had begun the process of obtaining finance, 43% profess to be having few problems in getting funding, 30% say they have encountered some problems, while 26% have found it difficult to raise finance.
Eighty-three percent of buyers have encountered some overpriced businesses and sellers who are inflexible with their asking price. Of those, 20% think many prices seem excessive and 10% found prices are mostly excessive with only a few sellers willing to lower their price.
The most popular reasons given for buying a business rather than starting from scratch were financially motivated, such as wanting to generate an immediate income (49.5%), believing buying to be a more cost-effective way to get into business (38%) and the risk of failure perceived to be lower (34%).
The majority of those surveyed (67.6%) used internet-based resources other than BusinessesForSale.com to search for a business.