Business Sales Report Spring 2024

M&A Landscape: A 2024 Q1 Analysis of Small Business Deal Activity

As we delve into the first quarter of 2024, we've noticed a significant transformation in the market dynamics for small sized businesses. Despite a slight decrease in overall deal volume, the resilience in specific sectors highlights strategic growth opportunities.

Market Overview and Trends

The market saw 2,534 deals on Axial’s platform, an 8.62% decrease compared to the same time period last year. Industrials was the only sector to see positive YoY new listing deal flow. Conversely, the transportation sector faced the steepest decline in activity, shrinking nearly 30% year over year as far as listings coming onto the market per Axial.

If you are a business owner of a consumer goods, food and hospitality or transportation business now may be a great time to list your business for sale with less supply on the market.

On BizBuySell, there were 2,384 businesses traded, amassing a value of $1.8 billion. The stats were led by a robust appetite for restaurant and retail sectors, despite their varying challenges.

Overall the business sales market continues to be strengthened by a high quantity of well qualified buyers who are looking for a business to purchase.

Sector-Specific Performance

In the restaurant sector, we observed a 9% increase according to bizbuysell in sale prices, indicating a strong buyer interest in well-performing entities.

While Food & Hospitality and Consumer Goods ranked among the top three in total deals for Q1, they were less actively pursued by buyers, ranking 7th and 6th respectively. Conversely, Healthcare showed a unique trend, placing 5th in deal volume but leading in pursuit rate. Therefore, if you are a business owner of a healthcare business and considering the sale of your business, the upcoming months offer a great opportunity to list your business for sale.

Sellers More Likely to Attract Buyers with Well-Managed Businesses and Strong Financials

In today's competitive market, aligning with a buyer's perspective can notably enhance a seller's likelihood of closing a successful deal. To begin, ensure that financials are transparent, reducing any non-essential expenditures to display clear profitability—a key consideration for financial backers and loan institutions. Additionally, demonstrate the business's operational independence by strategically scheduling time away. Bolstering the management team further raises business appeal. Finally, address potential buyer concerns such as customer dependency by broadening the customer base, cementing long-term relationships with key clients, or presenting a strong customer acquisition strategy to reduce perceived risks and augment attractiveness to buyers.

Looking Forward

The outlook for the upcoming quarters is optimistic with expected increases in deal activities for the second quarter and post-election. Businesses are becoming more adaptive with AI improving business performance and a higher amount of deal activity is utilizing seller financing and embracing SBA policy changes to accommodate a broader spectrum of buyers.