Andy Cagnetta: The Stats Don’t Lie

At Transworld Business Advisors, we keep great statistics, and it would be wise to understand the truths of the marketplace as dictated by those very statistics. Here are several hidden gems we unearthed in 2021 that we’d like to share.

It Takes Time to Sell a Business On average, it takes about 10 months. And as the deal gets larger in price, the average time to close grows to 12 months.

The Multiples Are Growing Historically, the average multiple for small businesses was just about two times seller’s discretionary earnings (SDE). This year, we reached three times! Quality and quantity of earnings drive multiples, so small businesses may sell in the 2-3 range, larger transactions result in greater earnings.

Overpriced Businesses Do Not Sell Businesses that are priced within 15% of their eventual selling price, do sell. Businesses that are priced higher often expire. Online business-for-sale portals and comparable databases have educated the market Therefore, more educated buyers tend to ignore overpriced opportunities.

Co-Brokerage is Essential The ability to sell businesses efficiently, where listing brokers agree to share commissions with outside brokers, has proven to be immensely effective. There is no arguing the fact that areas of the country and brokerage franchises like Transworld, which mandate or highly promote/facilitate sharing deals, sell more. In conclusion, if you want to be successful in selling your business, sell with a brokerage that is willing to share their fee; give them the proper amount of time, and price your business within the expected market price.

Read Previous

Laser Therapy Zaps Toenail Fungus

Read Next

Holiday Shopping Trends; Today’s New Consumer