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California Business Sales This Year Are Just Short of 9,000

Peter Siegel, MBA


Contributed by Peter Siegel, MBA

A total of 8,999 small California businesses for sale were sold in 2009, as of July 19, with a slowdown, in the most recently completed week.
 
We’re watching some interesting movements in business sales figures this year with competing pressures at work.

On one hand, the economy has caused a slowdown in the number of closed transactions this year. Not surprisingly, many people are hesitant to make important business decisions in an uncertain environment. Also impedes activity is the shortage of funds available to help finance business transactions.

But California’s small business buyers and sellers are very innovative. People keep finding ways to do business even with the obstacles in the current marketplace.

While transaction volume accelerated in the spring, it has declined this summer. That was predictable, since many people take vacations this time of year. And we’ve noticed the level of closed escrows in the just-completed week--totalling160--is half the weekly average--321--for the year.

But there is reason for optimism. For one thing, we anticipate some pent-up demand will put pressure on the market and we’ll see more activity this fall. Another factor is improved access to funding experienced by buyers and sellers of small and mid-market companies.

The SBA (Small Business Administration) is pushing banks and other business lenders to open the taps so there is financing available when a qualified buyer needs cash to complete a deal. One of the SBA moves in that direction was boosting its guarantees--up to 90% in some cases--so that lenders feel more secure and so there’s greater willingness to make loans. Another move was eliminating the rather costly fees charged borrowers. Without that cost, entrepreneurs are more encouraged to move forward with their purchase plans and search for the money they need so they can buy a business.

Here are the sales figures, by county, for the period: July 13 thru 19.

Alameda: 9, Butte: 2, Contra Costa: 2, Fresno: 6, Imperial: 1, Kern: 2, Los Angeles: 43, Marin: 2, Mendocino: 1, Merced: 1, Monterey: 6, Napa: 1, Orange: 17, Placer: 1, Riverside: 5, Sacramento: 4, San Bernardino: 6, San Diego: 9, San Francisco: 6, San Joaquin: 3, San Luis Obispo: 1, San Mateo: 2, Santa Barbara: 1, Santa Clara: 8, Santa Cruz: 1, Shasta: 1, Solano: 3, Sonoma: 6, Stanislaus: 3, Tulare: 2, Ventura: 4, Yolo: 1

Posted on July 22, 2009  |   Email This Blog Post   |   Print This Blog Post   |  All Contributions From Peter Siegel, MBA

 

Comments:

Boy, I would have to think there should be an increase in business. I hope it is sometime soon. Pent-up demand. Aren't there sellers who can't keep hanging on waiting for things to get better? They are going to have to accept a lower price or agree to help to finance. Or they will do both. Also, buyers that are determined to get a business might decide to buy something that is not the ideal but they have to start getting active in some kind of business and start a cash flow.

Posted by: Steve C.

Things do seem to have slowed down recently. I agree that the reason is because of vacations. I'm crossing my fingers and getting out my "prayer beads" in the hope that business heats up a little. If there's no businesses selling, then sellers are afraid to put up a business and buyers are also afraid.

Posted by: Louis Tek

This is quite an exciting ride, if you could call it that, for the U.S. economy and also for the business sales activity in California. You don't know what's going to happen next. No one does. I think your recap of the business sales figures is as good an index as any for people to follow and try to figure out what's going on in the present business scene. And what will happen next. Glad you're optimistic and hope you're right.

Posted by: David H.


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About This Blog
Peter Siegel, MBA is a nationally known consultant and author - with over 25 years experience on the topic of selling, buying, and niche financing (the purchase of), small to mid-sized businesses. His clients include: business buyers, business owners/sellers, small business advisors, and business brokers.
This Blog contains observations, tips, news, events, and case studies relating to selling or buying a small business.
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