Small Business Transactions Dip But Strong Market Remains

Small business transactions have been experiencing record numbers. Yet, the numbers from the second quarter of 2019 are showing a small dip. Experts believe that the trade war with China is playing a role in this dip.

According to BizBuySell, the number of transactions was 2,444 for Q2, which is a drop of 9.6%. The fact remains, businesses are still selling at record levels. There were 4,948 transactions reported in the first half of 2019. This means that 2019 could be the second most active business-for-sale market since BizBuySell began tracking data back in 2007.

The current trade war between the U.S. and China may be the reason why deals per broker are declining. Experts believe that increased tariffs and associated worries are behind the dip in the second quarter.

According to a recent BizBuySell poll of business owners, 43% are experiencing rising costs as a result of tariffs on Chinese goods. The trade war with China is impacting small businesses across the board.

With 64% of businesses noting that they will raise prices in order to address rising supplier costs, consumers will also feel the pinch. Another pertinent statistic is that 65% of small business owners are considering switching to suppliers not based in China, and 54% are looking for U.S. based supplies. If this trend continues it could mark a dramatic shift.

There is good news. According to BizBuySell, buyers looking for a business will discover that the supply of quality listings on the market is increasing. Now is a good time to buy a business. The number of businesses listed grew by 5.2% in the second quarter when compared to the same time last year.

Those interested in buying a business will find that now is truly a historically good time to do so. EBIT Associates can help you find a business that is right for you. While the trade war has injected some uncertainty, there is no doubt that now is a historically unique time to buy a business.

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