Increasing numbers of small business are for sale or selling - up eight percent during the second quarter according to BizBuySell.com, a brokerage site. But average sale prices are falling, something Mike Handelsman, group general manager of BizBuySell.com attributes to more smaller firms changing hands.
Median revenue for small business selling was $340,000 last quarter, says Handelsman. "Smaller, profitable businesses are likely being sold and helping to drive the increase in closed transactions," he says.
Sellers are financing these deals, since credit is tight, as the recession slowly dissipates. "Businesses and business buyers are only now getting to the point where they can borrow money," Handelsman said. The amounts changing hands are small: the media asking price is $175,000; the deals close for an average of $150,000.
We hear now and then about custom woodshops seeking buyers, or preparing for transition in other ways.
One such firm is Lacasse Fine Wood Products, a wood products supplier operating in northern Ontario for over 30 years. The company is going through the steps to split its owners' home from the property parcel that it shares with a woodworking manufacturing workshop, 10,000 square foot commercial showroom and warehouse, so the business can be separated from the house.
“Under its existing structure, that cannot happen because there are too many capital assets that my husband and I created through a lot of sweat equity,” owner Karen Lacasse told her local zoning board. “So if I want to continue for the next 30 years, I have to make some decisions today.” Lacasse kiln dries wood on site, and manufactures lumber, wood moldings, hardwood flooring, and wood stairs and railings.
An application to divide the property would give her the ability to financially prepare her company so it can transition later to new management, letting the Lacasses continue to live on their property, while still being able sell the business to a someone else.
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