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Why Buying or Selling a Small Business is Becoming a Big Deal

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This infographic on buying or selling a small business illustrates the growing popularity of entrepreneurship. Transactions of small businesses have climbed steadily over recent years, with 2016 hitting an all-time record high. According to BizBuySell’s Q4 2016 Insight Report, this can be attributed to an improving small business environment, with more owners looking to sell, more qualified buyers on the market and better financing options.

Moreover, small business optimism has increased significantly in recent months. The NFIB Optimism Index jumped 7.4 points between November and December 2016, reaching an all-time high of 105.8. The NFIB attributes this gain to expectation for real sales gains and outlook for business conditions. Yet, there may also be a political connection. According to BizBuySell’s December 2016 business broker survey, nearly 60 percent of brokers believe President Trump’s policies will encourage more buyers to enter the market.

Digging deeper into recent transaction activity, the top small businesses bought and sold were retail, including restaurants, which accounted for 43 percent. The service sector was the second most popular type of business, followed by manufacturing businesses and internet related businesses. California leads the pack for buying or selling a small business, with the most small business transactions in the U.S., followed by Florida, New York and Texas.

According to BizBuySell’s 2016 demographic study, small business buyers and sellers are predominately Caucasian, college-educated, married men, approximately 40-50 years old. Yet, 49 percent of younger buyers identify as a minority. The study also revealed that the top motivator for buying a business is the chance to be your own boss, and nearly half of small business sellers plan to exit their business in the next five years.

Publication: Article provided courtesy of BizBuySell

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