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Business Buyers View Financial Performance and Stability as Most Important

Writer's picture: Gary SmithGary Smith

While buyers consider many factors when purchasing a business, the majority (42%)

say financial performance is the most important, followed by growth potential at 26%,

and location third at 15%.


“Combination of financial performance and growth potential. For me it must be able to

pay itself off in about 3-5 years. It also must have scalability to grow in the future as

well," said a Tennessee based business buyer.


As has been the case for several years, buyers continue to favor stability when

evaluating opportunities. When looking at today's market, 69% of buyers view recession

resistant businesses as the most desirable opportunities followed by thriving businesses

at 38%.

Twenty percent (20%) are willing to take on a little more risk in the form of a ‘fixer

upper', discounting performance for a lower purchase price, while 11% are seeking a

closed business to acquire the location or assets only.


As buying a business becomes more mainstream, a new generation of entrepreneurs

with perhaps less hands-on experience, but a strong understanding of return on the

dollar has entered. Among the most notable entrants, 35% of today's buyers identify as

a corporate refugee, exiting corporate America for the independence of small business

ownership. Furthermore, 14% are recently retired, and 12% are recently unemployed.


The market is flooded with entrepreneurs interested in buying businesses despite

interest rates. This surge in popularity is reflected in the many courses that have

spawned in universities and colleges teaching entrepreneurship through acquisition.

Caution not everyone qualifies to buy a business or should be in business, however we

are seeing more of a younger demographic looking into business ownership than in

years past.

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