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Slight Dip in Market Confidence for Small Business Sales

According to the 2017 Buyer-Seller Confidence Index, published by BizBuySell.com, market confidence dipped compared to 2016 as both buyers and sellers wondered how much longer business for sale prices will increase.

This year’s study revealed that both buyers and owners are less confident in the market than at the same time last year. The 2017 Seller Index, while still positive, dropped slightly from 59 last year to 58 this year. The 2017 Buyer Index, meanwhile, dropped more significantly, from 49 in 2016 to 46 in 2017.

The report goes on to say, “The slight drop in Seller confidence doesn’t diminish the overall positivity that has persisted since BizBuySell started calculating this data in 2013. Similar to last year, 60 percent of current owner respondents said they are confident they would receive a price that met their expectations if they sold their business today. Additionally, more than 40 percent believe the environment improved in the last year, saying they could receive a higher sale price for their business than at the same time in 2016. Those owners credited improving sales and revenue (62 percent), an improving small business economy (43 percent) and an increased interest in their business industry (25 percent).”

For buyers the outlook is a little different.  BizBuySell notes thatWhile sellers have been consistently confident in their ability to fetch a good price for their businesses, buyers feel those rising prices come out of their pocket. It is perhaps no surprise then that the Buyer Confidence Index has remained below 50 since 2014, indicating acknowledgement that healthier small businesses mean higher asking prices. Maybe more interesting is that while buyers and owners share concern of what’s to come, owners fear a peak while buyers fear continued price increases.”

Read the complete BizBuySell report for more detailed information.