Thinking about selling your small business? Now might be the best time in years to make your move. Small business sales are booming.
The number of small business acquisitions has jumped 5% year-over-year, with transaction value increasing by 15%, showing a strong market with active buyers. This has resulted in 2024 in small businesses selling for higher prices, in less time, and more owners than ever before being exit-ready.
Trend 1: Small Business Exits Are Surging
Bob House, President of Business for Sale and BizBuySell at CoStar Group gave me his take on what’s driving this growth in small business acquisitions. “Good, profitable businesses are scooped up quicker than ever before. The largest number of buyers are still companies looking to expand and first time buyers who are leaving their jobs to work for themselves.” And…
“There is increased interest by recent MBA’s, private equity funds and search funds who are moving from mid-market to lower-market deals. This, in combinations with the rise in popularity of ‘entrepreneurship-through-acquisition’ is also increasing small business exits.” — Bob House, President, Business for Sale at CoStar Group
So what does this mean for small business owners? Buyers are actively looking for businesses that are profitable and well-structured, and they’re moving fast. If your business is in good financial shape, you may find yourself in a strong position to sell at a premium price.
Trend 2: Small Businesses Sold For Higher Prices in 2024
According to BizBuySell’s 2024 Insights Report, the median sale price of small businesses has increased by 3%, reaching $345,000 in 2024, up from $335,000 in 2023.
Trend 3: Time To Sell Has Decreased in 2024
One of the biggest concerns for business owners planning to exit is how long it will take to sell. In previous years, it could take 6-12 months or even longer. But recent data shows that this timeline is shrinking. According to BizBuySell’s 2024 Insights Report, the median time on the market has decreased by 3% to 168 days.
With private equity firms and search funds now shifting their focus toward smaller, lower-market acquisitions, the competition is heating up. If you’re a business owner thinking about selling, this is great news. Buyers are actively looking for strong, profitable businesses—and they’re willing to move fast to close deals.
Trend 4: Owners Are More Exit-Ready
At the same time, the 2024 Exit Readiness Report by The Big Exit shows that small business owners are becoming more exit-ready, meaning their businesses are in better shape to sell.
“The increase of Exit-Readiness Scores indicates that small business owners are more actively preparing their business for a sale.”
— Lien De Pau, Founder & CEO of The Big Exit
Exit-Readiness Scores, which measure how prepared a business is for sale on a 100-point scale, have steadily improved throughout 2024—rising from 59 in Q1 to 69 in Q3 before settling at 67 in Q4.
Why does Exit-Readiness matter? Buyers prefer businesses that are well-organized, financially transparent, and not reliant on the owner for day-to-day operations. Higher exit-readiness scores indicate that more businesses are checking these boxes, making them attractive to buyers and reducing the risk of failed transactions.
What These Trends Mean To Small Business Owners
The combination of increased interest, rising sale prices, faster transactions, and higher exit-readiness scores creates a golden window of opportunity for business owners who are considering selling.
How To Take Advantage Of This Market Shift
If you’re a small business owner considering an exit, now is the time to act. Here’s how you can maximize your sale price and speed up your exit process:
1. Get a Professional Business Valuation
Knowing your business’s true market value is critical. A professional valuation helps you set the right price and negotiate with confidence.
2. Strengthen Your Financials
Buyers want clean, organized financial records. Work with your accountant to eliminate unnecessary expenses, optimize cash flow, and ensure your financials are easy to understand.
3. Build a Business That Can Run Without You
If your business depends too much on you, it’s harder to sell. Document processes, automate tasks, and delegate key responsibilities to make your business more attractive to buyers.
4. Diversify Revenue Streams
Businesses with multiple income sources are less risky for buyers and often sell for a premium. Look for ways to add recurring revenue or passive income streams to boost your business’s value.
5. Plan Your Exit Strategy Early
The best exits don’t happen overnight. Start preparing at least 1-3 years in advance to make sure your business is exit-ready when the right buyer comes along.
Final Thoughts: Is Now the Right Time to Sell?
The data is clear—small businesses are selling faster and for more money in 2024 than the year before. With buyers actively seeking profitable businesses, a well-prepared business can attract strong offers in a short time frame.
If you’re considering an exit, take action now. Focus on increasing your business’s profitability, operational efficiency, and exit-readiness score to position yourself for the best possible sale.
[Check out the latest data in the BizBuySell 2024 Insights Report.]
[Check out the latest data in the 2024 Exit Readiness Report by The Big Exit]
Read the full article here
