Growing Uptick in Californian Mid-Sized and Small Business Transactions
The most recent records of sales of small and mid-sized businesses in California shows a marked increase compared to past figures. The Q1 2017 numbers from BizBen.com, an index that records California’s small and mid-sized business data, found that the State of California saw a record number of small business transactions.
Los Angeles City and County Leading the Way
The City of Los Angeles recorded significant increases in transactions, up 4.1% from the previous month and 4.4% from the same period in 2016.
“Approximately 403 small businesses were sold in the Los Angeles County Area out of 1,553 total overall sales of small businesses in the entire State of California,” says Peter Siegel, founder and president of BizBen.com. “I am seeing more activity in the overall marketplace with all participants in transactions.”
These participants are business buyers, business sellers, business brokers, and agents, Siegel says.
Despite the month-over-month and year-over-year increase, Los Angeles’ small business transactions was at its highest in January of this year when 443 total sales were recorded. The month of March saw Los Angeles’ greatest number of recorded small-business transactions, with 100 total transactions. The next highest ranked city was Torrance with just 16 small business transactions.
Los Angeles County has seen the lion’s share of small business transactions in 2107. As of the date of the report, the State of California recorded 1,553 transactions in 2017… over 1,200 occurred in LA County.
Key Economic Implications from Small Business Transactions
This noted increase in small business transactions results in some critical economic implications, the report says. Specifically, it advances the notion of an increase in sentiment from both the buyers and the sellers of small businesses, but there are other economic factors that impacted the sales of small businesses. Among these are the stabilization of interest rates—this has created a smoother path for buyers to obtain financing—along with consistent home prices and the relative ease in obtaining SBA loan financing to purchase a business.
Most Popular Business Transaction Types
The BizBen report featured 20 of the most popular business types traded in March of this year. They included branded gas stations and car washes, which were leading the list, with automated laundromats rounding out the top three.
Smoke and vape shops (14), as well as medical marijuana dispensaries (16) were included in the top 20. BizBen sees this as a trend likely to continue in California with the legalization of marijuana in last fall’s election.
In addition, restaurants were also predominant on the list, showing up in every type of eating establishment, from full-service restaurants to fast-food chains and pizzerias. This increase in the popularity of restaurants sales indicates a clear trend in the retail sector…one that’s become an Internet-resistance tenant for shopping centers. As such, it’s understandable that there’s substantial interest in these business models.
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Andrew Rogerson serves business and franchise owners, as well as those looking to purchase a business or franchise throughout Southern California and Northern California including areas like San Diego and Orange Counties, the Los Angeles metro area, the California Central Valley, San Francisco Bay Area, Sacramento County, Coastal California, and Sierra Nevada.
Andrew specializes in business valuation, creating a marketing strategy, and handling all phases of the transaction including third-party lending, due diligence, and escrow. He writes a blog on different topics about selling a business which you can read at our blog or subscribe to our newsletter with this RSS feed link.
If you have questions about business opportunities in and around Sacramento, Andrew can help answer your questions. Take some time to speak with Andrew about business transactions or visit our website services. Contact Andrew via email or call him at (916) 570-2674.