Traditionally, the summer months of July and August have been slow in the business brokerage industry. Buyers and sellers do not have their minds set on transferring businesses during the dog days of summer.
“This year, however, has been quite different,” says Achim Neumann, President of A Neumann & Associates, New Jersey. “We have had a significant number of valuations performed for businesses about to enter the market. The amount of valuations in August alone has exceeded similar timeframes during our best years.”
Possibly, this may foretell better times for business buyers. The ratio of business buyers to sellers has continued to stagnate at 3 to 1 for the past 18 months, based on a national average among the 450 Business Brokers Network’s offices— with many buyers not being able to find a suitable investment.
Where such a ratio in the current economic environment may seem unbelievable to an outsider, the fact remains that more buyers have stepped up due to lack of alternate investment opportunities. At the same time many sellers, due to declining profitability in their businesses, have exited the market.
“Valuations have always been a leading indicator for us,” says Neumann, “and conceivably we could have a change in the business transfer climate given what we have seen in August, despite a difficult business environment.”
Achim Neumann is president of A Neumann & Associates, LLC
an affiliate of BBN, Dallas, Texas, with 450 offices nationwide.
Visit the firm at www.neumannassociates.test
or call 732-872-6777