A Closer Look at BizBuySell’s Report for the First Quarter of the Year

A Closer Look at BizBuySell’s Report for the First Quarter of the Year

For our last webinar, we were joined by BizBuySell’s Doug Whitmire and Adam Debussy. Whitmire and Debussy covered BizBuySell’s latest Quarterly Report, which focused on the first quarter of the year. They provided a recap for transaction trends, info, and survey data designed to help brokers as well as buyers and business owners.

Rebounding Transactions

For Q1 2022, the Quarterly Report indicates that transactions are continuing to rebound from the slump of Q2 2020. Year over year, transactions shot up a whopping 24% and are now beginning to return to 2019 levels. Overall, the main sector that seems to be holding back an even stronger rebound is the restaurant sector. The restaurant sector is still not where it was pre-pandemic. However, with that stated, the restaurant sector has also dramatically improved and has shot up by 42% year over year. Yet, the restaurant sector is still down 22% from Q1 2019.

Business Buyer Survey

When BizBuySell surveyed buyers as to what kind of business they wanted to buy, the numbers were eye opening. 35% of surveyed buyers responded that they were interested in the service sector, and this was followed by 15% of respondents choosing retail. Whitmire stated, “Buyer demand seems to be leaning toward business services, self-storage, car washes, as well as advanced distribution services for manufacturers. There have been few opportunities, so buyers are flocking to them and inventory is limited.” The result of the limited inventory is record sales prices.

Listing Growth

In Q1 2022 listing growth has increased substantially, with service listings up 14%. While the restaurant sector is obviously still lagging, it is important to note that the Quarterly Report indicated that restaurants were experiencing a 10% growth. Whitmire and Debussy speculate that if the pandemic continues to recede, we could see a robust rebound in the restaurant sector.

A Boom in Sellers

The report also indicates that sellers, who have previously been sitting on the sidelines, are deciding that now is the time to sell. Once again there is talk of a “silver tsunami” approaching as Baby Boomers begin to sell. It is also interesting to note that many of those who are selling are doing so due to burnout. Importantly, burnout is occurring for a variety of diverse reasons, ranging from supply chain and labor issues to pandemic burnout.

Advice for Brokers

Whitmire and Debussy strongly advise business brokers and M&A advisors to guide sellers towards fixing major supply chain issues before entering the market. Whitmire noted, “We try to get our clients to work with us to fix those issues before we go to market. Many times, you only have one chance with a buyer and then you lose them.”