Closed Sales of Small Businesses Drop, But Values Up, Report Says

2019 BizBuySell Insight Report

In 2019, closed sales among small businesses decreased by 5.5% from 10,312 deals in 2018 to 9,746. The median sale price of a business sold in 2019 increased by $1,000 to $250,000 compared to 2018.

2019 BizBuySell Insight Report

The data was unveiled by BizBuySell’s Annual Confidence Index, a nationally-recognized economic indicator that tracks the health of the small business economy in the US by analyzing statistics from transactions reported by participating business brokers across the country.

The 2019 BizBuySell Insight report research found that the median sale price of a business sold in 2019 was up by 7%, increasing from $531,653 in 2018 to $567,000 in 2019.

The median cash flow of a business increased by 2% from 2018 to 2019, reaching $122,506.

BizBuySell’s findings are important for small business owners and entrepreneurs as they shed light on the top performing markets by sales, the industries that are performing the best, and the overall financial health of small businesses.

The index also explored leading concerns among small business owners, insights that can be useful for anyone operating a small business to be aware of.

More Information from the BizBuySell Poll

The opinion poll indicates the rising minimum wage concern small business owners greatly. The presidential election results and tax regulations come in close behind.

Furthermore, 42% of small business owners claim tariffs on Chinese goods continue to increase their business costs. And of that 42%, 64% plan to increase prices of their goods or services in order to stay afloat.

One such small business owner is Richard Williams. He owns Franklin Transmission and Auto Care in Massachusetts.

“The steel tariffs with China have increased my parts cost an average of 35%. This is reflective in my bottom line and it’s not like I can raise prices by 35%. It would cause me to go out of business,” Williams told BizBuySell.

The industry that witnessed the strongest financial growth in 2019 was retail. Restaurants also fared well in the report. Manufacturing experienced significant drops in performance.

A Look at the Best Performing Markets

In terms of the best performing markets, Richmond, Virginia saw the biggest increase in activity, with 53% more businesses being sold compared to the previous year. Baltimore, Detroit, San Antonio, Dallas and Houston all reported business sale growth.

The index shows that there were 9.746 closed sales reported by brokers in 2019, which equated to a 5.5% drop from 2018. However, it is important to note that 2018 set the BizBuySell record for the highest number of closed sales.

Transaction activity slowed in 2019 compared to 2018 for the whole year. But the fourth quarter showed that sales were beginning to bounce back. And more positive growth trends and levels remain historically high.

Do you own a small business or are you thinking about starting a small business in 2020? Use the BizBuySell Annual Confidence Index as a marker of the overall business climate in the US. You’ll also learn what business owners’ concerns are. This helps them determine which industries and in which locations are performing the best.


Gabrielle Pickard-Whitehead Gabrielle Pickard-Whitehead is a staff writer for Small Business Trends and has been a member of the team for 7 years. She is based in the United Kingdom and since 2006, Gabrielle has been writing articles, blogs and news pieces for a diverse range of publications and sites. You can read "Gabrielle’s blog here.".