The number of deals to purchase a business in California showed modest improvement last month over sales of small and mid-market businesses during the same month a year ago, suggesting continued growth is taking hold in the market. Some 1,002 escrows closed during the month, compared to 959 concluded transactions in February 2009.
So far, this looks like the slow and steady improvement we’ve been anticipating. Conditions for sales activity aren't improving in any meaningful way. To a great extent it’s the resourcefulness of California’s entrepreneurs that has been responsible for this growth.
People who want to purchase a business still are having trouble getting lenders to help them fund deals. And the mood of uncertainty is casting its shadow on the small business sales market, just as it influences the stock market, the real estate business and other key sectors of the economy.
But rather than sitting on their hands and waiting for all the lights to turn green, a lot of buyers and sellers are finding ways to put deals together. We’ve seen an increase in seller financing, more earn out agreements and some other approaches that entrepreneurs are employing to accomplish their goals.
Many of the state’s largest counties recorded higher sales of small businesses, including Los Angeles with a 10% increase in transactions last month (268) compared to last February (242), San Bernardino where deal volume jumped a whopping 75% (from 29 to 51), and San Francisco, with a 40% increase (from 30 to 42.)
Deal volume in Orange and San Diego Counties remained about the same and Sacramento County showed a decline of about 39% (31 sales in February 2009 vs. 19 last month). Some 94 deals were completed in Orange County in the just-completed month, two more than last February. San Diego County recorded 100 transactions in February 2010, one more than the same 2009 month.
The statistics we’ve compiled also show that sales rate for small and mid-sized business last month was roughly equal to activity in January, on a closings-per-day basis. While 72 more people were willing and able to purchase a business during the first month of the year compared to last month, there was an extra business day in January to account for the difference.
BizBen.com has been matching people planning to sell or to purchase a business since 1994 and for the past 12 years has furnished all interested participants in the market with monthly sales data.
February sales results by California County are accessed at http://www.bizben.com/stats/stats-total.php and are as follows:
Alameda: 46, Butte: 9, Calaveras: 4, Contra Costa: 29, El Dorado: 3, Fresno: 29, Glenn: 1, Humboldt: 1, Imperial: 5, Kern: 21, Kings: 1, Lassen: 3, Los Angeles: 268, Madera: 1, Marin: 6, Mendocino: 2, Merced: 6, Monterey: 10, Napa: 4, Nevada: 1, Orange: 94, Placer: 8, Riverside: 20, Sacramento: 19, San Bernardino: 51, San Diego: 100, San Francisco: 42, San Joaquin: 17, San Luis Obispo: 11, San Mateo: 17, Santa Barbara: 13, Santa Clara: 52, Santa Cruz: 20, Shasta: 3, Siskiyou: 1, Solano: 8, Sonoma: 18, Stanislaus: 13, Tehama: 2, Tulare: 14, Tuolumne: 3, Ventura: 22, Yolo: 4.
About the Author: Founder and CEO of BizBen.com, Peter Siegel, MBA has been consulting with business owners, business buyers, business brokers & agents for over 25 years who plan to sell or purchase a small to mid-sized business. Peter Siegel can be reached direct at 866-270-6278.