“For Sale” sign surge

Nearly three times as many businesses were for sale in the March quarter and it’s affecting prices. ANDREW KENT

By Andrew Kent

There are nearly three times as many businesses listed for sale (in print and online) in the March quarter than for the same time last year, according to research the BizExchange team is putting together now. 

The increase in volume is definitely softening the expectations of sellers, with nearly 10% of listings for which data was available valued at less than one year’s earnings.

For those involved in doing the research for the BizExchange index of private business values, this is quite startling – particularly as it was only a year ago that this level of valuation was first detected in the market.

It is also apparent that businesses are taking longer to sell, with a significant number of listings able to be identified as carried over from the previous quarter, although this is not true across all sites and sectors.

The BizExchange website has continued to have an increasing number of inquiries for larger businesses (turnover in excess of $5 million), ironically at a time when there has been a reduction in the number of larger businesses for sale across all sites and publications – particularly in the wholesale and transport sectors.

At the same time a number of other sites and publications have experienced a significant increase in volume of listings at the small end of the market (turnover of less than $500,000).

Andrew Kent is a director of BizExchange, an independent marketplace for business for sale or seeking investment. BizExchange has a directory of independent advisers and business brokers and information on valuations.

If you would like to receive a free copy of the BizExchange index when it is release you can subscribe to it at www.bizexchange.com.au. Further updates and analysis will also be available in this blog.

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