Small business acquisitions reached a familiar milestone in the second quarter after
growing 5% over the past year and 3% from last quarter, according to BizBuySell's
Insight Data, which tracks and analyzes U.S. business-for-sale transaction and
sentiment from business owners, buyers, and brokers. A total of 2,448 businesses were
reported as sold in the second quarter of 2024, representing an enterprise value of $1.9
billion, which is 20% higher than the same time last year.
After falling 13% in 2022 amid rising interest rates and red-hot inflation, transaction
volume has made a strong rebound and now matches 2019's pre-pandemic levels. At
the same time, demand has pushed the median sale price up 25% year-over-year to a
record high of $375,000, as buyers continue to focus on businesses with strong
financial performance. The median revenue of businesses sold in Q2 2024 grew 4%
year-over-year and median cash flow grew 7%, respectively.
This dynamic of moderate growth and heightened demand for premium businesses is
occurring as inflation is cooling, with the Bureau of Labor Statistics reporting that the
Consumer Price Index (CPI) dropped to 3.0% while unemployment rose to 4.1%. With
interest rates expected to be cut relatively soon, this opens the path for a boon to an
already rising business-for-sale market. According to BizBuySell's recent small business
survey, 24% of business buyers say they are waiting for interest rates to decrease
before making a purchase.
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