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January Small Business Opportunity Sales In California Gain 24%


A total of 1,024 mid-sized and small business opportunity offerings changed hands in California last month, a 24% increase from the 865 sales recorded January 2009.

Most of the strong increase occurred in Southern California with Los Angeles posting 292 sales last month compared to 227 during the first month of last year, Orange County recording 96 deals vs. 80 in January 2009, and Riverside County showing an increase from 16 during last year’s January to the 25 closed escrows for the month just completed.

Northern California and the central part of the state turned in mixed results. Sacramento County saw 27 sales, 6 fewer than a year ago, the January total for San Francisco was 34 vs. 40 during January of last year. Alameda County saw a decline from 72 to 58 transactions.

The overall strong start for the year had been anticipated as business brokers have been reporting increased activity. In recent weeks they’ve been receiving more phone calls, conducting more showings and writing more offers. All of this results in more closed small business opportunity escrows.

The gains can be attributed largely to pent-up demand. Many business owners who’ve thought about selling and were postponing the decision hoping for a more favorable economic climate are deciding to "pull the trigger."

As one told me: "There’s no telling how long we’ll have to wait until profits are back up and I can get a better price. Meantime I’m not doing other things I want to do. So I’ve listed the business for sale. It’s time to move on.”

 

Indications that the economy is starting to turn around are encouraging sellers, and also buyers, to get involved in the market.

Long Term Small Business Opportunity Trends

Expectations for the long term point toward continued growth in activity in the small business opportunity marketplace. On the demand side, the fact that more people are out of work than at any time in the recent past translates to more buyers out there contacting sellers and brokers so they can find a business to buy.

At the same time, the baby boomers who have their own businesses are nearing retirement. If the business is not a good fit for the owner’s kids or employees, it’s going to come on the market. So we can look forward to increased supply for the growing number of buyers.

Lending Remains an Issue

One of the biggest impediments to completing deals, of course, has been the shortage of money available from business lenders. This followed the mortgage meltdown and the credit crunch that we went through starting in the fall of 2008.

If there is more money available for buyers to complete their deals, it will certainly help to spur activity in the marketplace for small businesses.

We're hoping that President Obama’s pledge to provide small business with $30 billion in TARP (Troubled Asset Relief Program) money through local lenders will be instituted and will have the desired result.

Also contributing to boosted sales activity is the innovation and determination of California’s entrepreneurs. They’re pretty resourceful at finding ways--such as seller financing, earnout agreements and vendor assistance--to fund deals without the help of the banks.

We’ve been providing the public with mid-sized and small business opportunity sales statistics in California for the past 12 years. This information represents an important indicator of economic activity and is valued by BizBen.com visitors, including business buyers and sellers, brokers and other professionals who serve this marketplace.

County-by-county Breakdown

The by-county sales of small and mid-sized California business opportunities during January 2010 are as follows:

Alameda: 58, Butte: 8, Contra Costa: 27, El Dorado: 9, Fresno: 40, Glenn: 1, Humboldt: 1, Imperial: 4, Inyo: 1, Kern: 20, Kings: 1, Los Angeles: 292, Madera: 1, Marin: 11, Mendocino: 2, Merced: 8, Monterey: 15, Napa: 9, Nevada: 5, Orange: 96, Placer: 14, Riverside: 25, Sacramento: 27, San Bernardino: 38, San Diego: 68, San Francisco: 34, San Joaquin: 30, San Luis Obispo: 15, San Mateo: 17, Santa Barbara: 12, Santa Clara: 83, Santa Cruz: 11, Shasta: 4, Solano: 9, Sonoma: 11, Stanislaus: 24, Sutter: 3, Tehama: 1, Tulare: 14, Tuolumne: 3, Ventura: 16, Yolo: 6

About the Author: Peter Siegel, MBA, the founder and CEO of BizBen.com,  is a consultant to business brokers/intermediaries, business buyers, and small business owners interested in business opportunity purchases and sales. You can phone him at 925-785-3118 to discuss the best ways to utilize BizBen to buy or sell a California business.


Categories: Business For Sale Statistics


Comments Regarding This Blog Post


I specialize in restaurants and bars, and I can attest to that sales in December and January are good, because many business owners resist selling during the summer time, in part, because business is good, but later when business slows down (after summer), they end up putting them up for sale. A buyer who goes into escrow in the Fall, may end up closing during the last part or early part of the following year. As a business broker, I recommend that other business brokers should work strong till the end of the year, and not be tempted to lighten up on the gas pedal of their business during the holiday season. Listings that are taken during the third and fourth quarter, may later be closings during the 1st quarter of the following year.


  Helpful Resources To Assist In Selling And Buying California Businesses
Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.

Helen Yoo: Escrow & Bulk Sale Services - Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Janet Carrera - Escrow & Bulk Sale Services - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.

Shalonda Chappel-Pilgram: Escrow Services - Southern CA

Escrow services to brokers & agents, owner/sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services.

Joe Sandbank, Esq. - Legal Services

I have provided legal counsel to business buyers, sellers and brokers for over 17 years. With prior experience as a business broker and SBA loan officer, Joe brings both a practical and legal approach to all aspects of the business acquisition process.

Brad Steinberg, Broker - Laundromat Specialists

PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.

Elizabeth McGovern: Escrow Services - SF Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.


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