Northern California 2018 business sales
As the Baby Boomers who own a business, continue to retire and therefore try to sell their business, its interesting to see what’s happening or the trends.
BizBuySell.com is one of the websites I use to market a business for sale. Recently they released a report with statistics about the sale of businesses during 2018. The statistics cover the national market and so I pulled some of the data for Northern California businesses sold in 2018 with a focus on Fresno, CA, Sacramento/Roseville, CA, San Francisco/Oakland/Fremont, CA and San Jose/Sunnyvale/Santa Clara, CA and added my observations.
Fresno business for sale market
As the above table shows for businesses for sale in the Fresno, CA area includes:
- The number of businesses listed for sale is increasing each quarter.
- The number of businesses sold fluctuates.
- The Median Sold Price is generally increasing each quarter.
- The average Revenue Multiple for the sale of a business remains unchanged at .76. That is, if a business generates $1,000,000 per annum in gross revenue, the price it sells for would be $760,000.
- The Median Days on the market before a business sells in Q1 was 426 days while for Q4 it was only 222 days.
Sacramento/Roseville, CA business for sale market
As the above table shows for businesses for sale in the Sacramento/Roseville, CASan Francisco/Oakland/Fremont, CA business for sale market area includes:
- The number of businesses listed for sale remains very static each quarter.
- The number of businesses sold fluctuates each quarter and the trend is declining.
- The Median Sold Price fluctuates wildly each quarter.
- The average Revenue Multiple for the sale of a business fluctuates wildly between 1.18 and 2.13.
- The Median Days on the market is fairly consist each quarter by ranging between 147 and 160 days.
San Francisco/Oakland/Fremont, CA business for sale market
As the above table shows for businesses for sale in the San Francisco area includes:
- The number of businesses listed for sale remains consistent each quarter with the low 479 and the high 541.
- The number of businesses sold fluctuates from 29 up to 47.
- The Median Sold Price each quarter varies wildly with the low $156,500 while the high is $362,500.
- The average Revenue Multiple for the sale of a business varies between a low of .35 and a high of .69.
- The Median Days on the market before a business sells was a low in Q3 of 157 days while for Q1 it was only 247 days.
San Jose/Sunnyvale/Santa Clara, CA business for sale market
As the above table shows for businesses for sale in the San Jose area includes:
- The number of businesses listed for sale is consistent each quarter with a low in Q1 of 174 and a high in Q4 of 189.
- The number of businesses sold ranges from a low of 15 to a high of 22.
- The Median Sold Price swings from a low of $164,500 to a high of $290,000.
- The average Revenue Multiple for the sale of a business varies from a low of .43 in Q3 to a high of .76 in Q1.
- The Median Days on the market before a business sells in Q3 was 181 days while for Q2 it was 242 days.
Planning to sell your business in 2019?
If you plan to sell, make sure your financial statements are accurate and up to date now that 2018 has come and gone. Buyers will be looking for a full 2018 P&L, but third-party lenders will want to see the business tax return; so, get it filed. Poor quality financial statements are the number one reason a buyer inquires and then walks away from completing the sale. That is a motivated buyer is simply not willing to accept financial statements that make them uncomfortable. I see this time and time again.
If you have questions about the value of your business or the steps it takes to sell a business, send me an email or give me a call on (916) 570-2674.
