According to the BizExchange Index June Quarter 2011, the number of businesses advertised for sale has reached new heights during the quarter but, as market sentiment declines, fortunate will be those who are able to sell their business for the right price.
Echoing a sentiment expressed in the first quarter 2011, the second quarter BizExchange Index has registered a new record in the number of businesses advertised for sale. But things aren’t looking good for business owners looking to retire as market sentiment hits its lowest since March 2009.
“At present negative sentiment is pervasive, responding to global sovereign debt issues affecting the global economy and a number of local issues including natural disasters, together with poorly considered government policies and implementation,” said David Bird, BizExchange Chairman.
“It is any wonder people are extremely cautious and have their hands in their pockets? We are certainly not moving forward but rather in gridlock.”
The Index found that values in the private business market are following three different trends. The value of businesses in mining and some agriculture are booming. The value of most manufacturing, business and financial services are relatively flat. While the value of retailers, cafes, hospitality and tourism is going down.
The report also found that the increase in the number of low-end businesses on the market is directly responsible for the decrease in value of micro-businesses. Larger businesses, however, are still selling strong as they belong to a part of the market that has in mergers and acquisitions the main source of buyers.
According to the Index, it is hard to predict if the number of businesses for sale will continue to rise in the next quarter. On one hand, it is expected that business owners will continue to looking forward to sell their businesses. On the other hand, many businesses owner might find that it is simply not worth to sell in the present market.
“Cash is king at present and uncertainty is rife, therefore it is a good time for cashed up parties to investigate acquisition opportunities,” said David Bird.
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