Heading into the second half of 2024, the business-for-sale market is expected to
continue growing at a modest pace. While costs remain high, businesses are adapting
to this new environment and finding ways to maintain profitability. In fact, 37% of owners
expect their business value to increase over the next year.
At the same time, key economic indicators signal rate cuts on the horizon, with many
analysts expecting an announcement during the September Federal Open Market
Committee meeting at the latest. Under these conditions, buyers can expect to find
great opportunities with increasingly favorable terms.
It's also looking more and more like an ideal time for sellers to exit their business. The
presidential election is just around the corner and Donald Trump is widely favored in the
small business community. Of business owners surveyed, 53% say they believe he will
have the best impact on small business, compared with only 14% to Joe Biden and 3%
to Robert F. Kennedy, Jr.
"[The election outcome] will be interesting. We expect rates to start declining regardless
of who wins. If we move into a situation where taxes may increase, we should see more
sellers either rush to the market or wait another 4 years. If the opposite occurs, the
market should remain steady. Either way, there are still a lot of baby boomers that will
retire in coming years which should keep the market steady," said Loftin.
While politics and economic soundbites occupy the media headlines, ultimately, the
main market driver comes down to individual circumstances. Seventy-eight percent
(78%) of owners indicate personal reasons will decide their time to exit versus just 22%
letting market conditions decide their fate. Furthermore, retirement remains the number
one motivation for selling as indicated by 45% of soon to be exiting owners. While the
impact of the election can be debated, the reality that 10,000 Baby Boomers retire each
day is likely the most important element to fuel the market forward.
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