Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

November 5, 2010

New Jersey Small Business Transactions Are Still at a Low Volume Level

By Joseph Eneldas

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PRESS RELEASE
 
Atlantic Highlands, NJ, November 5, 2010 – A Neumann & Associates, a ten-year-old NJ business broker and business valuation firm has announced that they are seeing small business transactions at a low volume level for the second year in a row.
A significant indicator of small business environment health is the number of businesses bought and sold.  1,117 U.S. small businesses were sold during the third quarter of 2010, approximately the same number that sold last year during the same time period. By contrast, there were over 345 more sold either via business sale by owner or through business brokers, during the same period two years ago in 2008, according to reports BizBuySell.com.
While other areas of the business continue to grow, A Neumann & Associates reports stable activity levels for the business transference portion of their business broker NJ company.
Similar to the housing market, a combination of tight credit, nervous buyers and owners unwilling to sell at discounted prices has left the small business marketplace without growth. And, they say, for small business owners hoping for a big payoff when selling their businesses via NJ business brokers, most will need to reset their expectations.
During tough economic times some owners might be forced to sell out of necessity– even as potential buyers stay away for fear that the market still needs to swing up. “This pushes down the value of many businesses that are up for sale, while at the same time reducing the number of businesses that change hands across the board.” according to Achim Neumann, President of A Neumann & Associates, NJ business brokers.
Some owners say they have identified interested buyers, but that some of these buyers are unable to obtain sufficient funding amid declines in loans guaranteed by the SBA (Small Business Administration). The agency backed $16.84 billion in loans in 2010, down from about $20.61 billion in 2007.
“One of the problems is that owners are not going through the proper business valuations and as a result are coming up with price tags greater than their companies’ true value,” said Neumann. Many business owners are shying away from the  marketplace as a result. Though the number of enterprises sold in the third quarter was the same, there was a 7.1% decline in listings from a year ago, to 31,856, according to BizBuySell.
“Many sellers are offering to finance part of the asking price for buyers to help close the gap, whether they use a business brokers or do a business sale by owner” added Neumann, “We’ve been seeing a sharp increase in this type of arrangement over the last 20 months.”
During the third quarter of 2010, small businesses were listed for a median price of $245,000. However, the average closing sale price in the period was $140,000, 6% less than what owners sold their businesses for during the same period in 2009.
“Some owners are waiting for the market to bounce back and business valuations to go up while others believe we’re already there. It can be a very subjective and emotional situation,” explains Neumann.  “We try to take the emotion out of it by putting rigor around what can be a long, messy process left in inexperienced hands.”  For more information, please contact A Neumann & Associates at 732-872-6777.
 
About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or info@neumannassociates.com

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Client Testimonials

“I'm an attorney. I have represented the buyers and sellers of businesses for 20+ years. Recently I had the pleasure of handling a transaction where Richard Wilder of A. Neumann & Associates was the broker for the seller. Mr. Wilder was of great service to his client. He is very knowledgeable and organized. Thanks to his guidance the transaction proceeded smoothly and closed on time. He is highly recommended.”

Nick Ferrante

“Richard, you came to my office a few years ago and were wonderful in explaining your process and procedures. Our company is probably an anomaly in that we sold the majority to two long time employees and I financed them both. Our company is entering its 45th year and is still thriving. The purpose of the note is to thank you very much for the service that you provide. Thank you again.”

John Foug, Seller

“We had a great experience working with Richard Wilder from Neumann and Associates as the sell-side broker for Blade Runners. He was knowledgeable, professional, and clearly had his client’s best interests at heart. Richard helped keep the process smooth for everyone, and thanks in part to his efforts, we found a fantastic owner to partner with. We'd gladly work with Richard and the Neumann and Associates team again.”

Justin Martin

“Very happy with Richard and the entire process. I was on the buyer side of the transaction.”

Isaac Palmer, Jr.

“If you are looking for a professional and informative company that meets your needs, A Neumann & Associates is the company to go with. Ted Kantor went above and beyond to make our experience as easy as possible. Ted was helpful from the start of our process to the end. He was there every step of the way to guide us and answer all of our questions. He handled all of the in-depth communication and followed up on every detail. We strongly recommend Ted Kantor to help you whether you're buying or selling. It was a great experience. We never imagined it would go as smooth as it did. The Laluna's (Andy, Maria & Tony Jr)”

Maria Laluna

“A Pleasure to work with - I highly recommend them! Working with Richard Wilder was a pleasure, and he found us the perfect match.”

Laura Keith-Macario

“This spring we acquired a business that was represented by Richard Wilder at A Neumann & Associates. Small business acquisitions can be very emotional for the sellers and life-changing for the buyers, and Richard was keenly aware of this throughout the process. Although he was working for the sellers and not for us, he knew that most business owners see their business as their baby so the only way to have a happy outcome for his clients was to also have a happy outcome for the buyers. Knowing how nerve-wracking this process can be (think home buying x 10), he never dropped the ball on keeping everyone updated, anticipating potential snags, and guiding us along in the process. We highly recommend Richard.”

Shannon, Buyer

“My business was my baby for over 40 years. It is a tough and cruel world out there when it comes to selling your business. Neuman and Associates provided the professional guidance/protection to get the job done with care and no pressure. In my view a tremendous value. I would recommend them to anyone seeking to sell their business. Eric Storck, president of Blade Runners Inc.”

Eric Storck, President - Blade Runners Inc.

“I’m really impressed with how your firm operates. The focus on confidentiality, the thorough vetting process, and the use of third-party accredited valuations really stand out. It’s easy to see why you’ve built such a strong reputation over the years.”

Ann M., Investor

“Thanks for sending over such a detailed CIM.  While I have only reviewed a have dozen CIMs at this point, your company has put together the most comprehensive data and detailed presentation I have seen so far.”

Ben N., Investor
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Contact A Neumann & Associates, LLC

If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

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