19 Jun Small Business Melting Pot (Part 2 of 2)
Small Business Melting Pot: Increasing Diversity Among Business Buyers as African Americans, Hispanics and Asians Push to Acquire Small Companies
In the fourth and final installment of a series of articles investigating who is buying and selling small businesses in America, BizBuySell looks at how race affects buyer demographics and the motivations behind small business acquisitions.
The following is a continuation from Part 1.
International Presence In U.S. Small Business Market
As the corporate world continues its march toward globalization, a trend toward greater global diversity is also occurring within the small business community. When asked about their U.S. citizenship status, prospective business buyers responded in a manner that highlighted strong international influences throughout the small business community.
As might be expected, the Caucasian demographic had the highest percentage of natural born citizens at 79 percent. African Americans followed at 70 percent, while just 40 percent of Hispanics listed themselves as naturally born citizens.
Asian buyers represent the smallest ratio of natural born citizens at less than 10 percent, with the majority (52 percent) listing themselves as naturalized citizens.
Buyer Ethnicity Reflects Type of Business They Are Interested In
Finally, several interesting trends emerged when buyers were asked to identify the type of business they are interested in purchasing. Restaurants were the most popular business category overall, with at least 20 percent of all ethnicities expressing an interest in purchasing a food service establishment. Thirty-five percent of Hispanic buyers indicated an interest in restaurant ownership, outpacing all other ethnic categories and making opportunities for food service ownership the dominant acquisition target for Hispanics.
Caucasians most often sought out manufacturing businesses (22 percent) or a bar/tavern (21 percent). African Americans were the most likely to be interested in acquiring a bar/tavern (24 percent), but also expressed the most interest in a beauty salon or barber shop (17 percent). Asian buyer preferences pushed toward convenience stores (40 percent), gas stations (36 percent) and liquor stores (32 percent).
For both buyers and sellers, it’s important to remember that the racial and ethnic trends that exist in the current business-for-sale market need to be taken at face value. Every business transaction ultimately boils down to basic sale fundamentals (e.g. purchase price, available capital, etc.), regardless of the prevailing demographic trends that may or may not be occurring in specific segments of the market.
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