Last Month Set Year's Record for Business Sales

We've just completed the busiest month so far this year for the sales of small and mid-sized businesses. Some 1,298 transactions were closed, up about 21% from the 1,075 deals completed during July 2009. And it was an improvement over the 1,090 business for sale transactions finalized in June 2010.

This news is positive, but before we interpret it as a clear signal that the market is starting to boom--after a disappointing seven months compared to past years--we need to be aware that several deals scheduled for June 2010 closings actually were completed last month. Some of the principals and brokers were on vacation during June, or were not prepared to close when originally scheduled.

Meanwhile, it’s encouraging to notice that buyers and sellers and their business brokers are finding ways to overcome one of the biggest impediments to strong sales--the reluctance of community banks in this area to provide the funds needed by buyers and sellers to complete deals. One of the solutions is that sellers are, in a growing number of situations, becoming the bank so they can complete their deals. In some cases sellers are taking lower prices and offering very generous terms initially, with the understanding, as part of the deal, that they’ll benefit with bonuses as the business improves in the future.

Many of the state's large counties recorded higher sales numbers last month compared to July 2009. Los Angeles County entrepreneurs finalized 352 transactions in July, up from the 312 deals completed in the same period last year. Sales in Santa Clara County hit 77 in July 2010. That’s a boost of 79% over the 34 deals closed in July 2009. San Francisco recorded 61 business opportunities sales last month, a jump of about 33% from the 46 transactions closed in July 2009. And Sacramento County’s figures were up by the same percentage, 45 vs. 34 deals in July last year.

A small decline was recorded in San Diego County--92 deals last month and 96 in July of last year, and Orange County saw a drop of 11%, from 126 deals to 112.

July sales results by California county (available at http://www.bizben.com/stats/stats-monthly-jul.php) are as follows:

Alameda: 55, Amador: 4, Butte: 5, Calaveras: 1, Contra Costa: 20, El Dorado: 5, Fresno: 34, Humboldt: 1, Imperial: 1, Kern: 30, Lassen: 1, Los Angeles: 352, Madera: 1, Marin: 12, Merced: 7, Monterey: 20, Napa: 18, Nevada: 3, Orange: 112, Placer: 10, Riverside: 45, Sacramento: 45, San Bernardino: 54, San Diego: 92, San Francisco: 61, San Joaquin: 23, San Luis Obispo: 11, San Mateo: 24, Santa Barbara: 27, Santa Clara: 77, Santa Cruz: 4, Shasta: 10, Siskiyou: 1, Solano: 10, Sonoma: 28, Stanislaus: 18, Sutter: 5, Tehama: 4, Tulare: 22, Tuolumne: 4, Ventura: 32, Yolo: 7, Yuba: 2

About The Author:  Peter Siegel, MBA is the Founder and President of BizBen.com. He is a SBA SCORE Counselor, author, consultant/coach, and advocate on the topic of buying and selling small to mid-sized businesses in the California marketplace. Having writen three books and hundreds of publication articles he has assisted small business owners/sellers, business brokers, agents, and business buyers for over 25 years. For a FREE consultation on how to best sell or buy a California small business phone him direct at 866-270-6278.

Posted on August 1, 2010  |   Email This Blog Post   |   Print This Blog Post   |  All Contributions From Peter Siegel, MBA