Small Businesses Discounting the Biz

For small business owners wanting to sell their businesses, interested buyers are skyrocketing but so are the sellers of businesses.

The country’s largest listing site, bizbuysell.com, has 50,000 businesses for sale — up from 43,000 this time last year, said Michael K. Handelsman, the site’s general manager.

And why are so many people investigating small businesses? Here's what someone who brokers the selling of small businesses says:

“When economic times get tough and people can’t find a job, they will go out and buy a job,” said Ronald W. Hottes, president of the Business Team, a broker in Torrance, Calif.

Small businesses are also being sold at big discounts right now because of tighter credit and rising costs. But there's even worse news. The typical small business seller is not going to be able to sell their business.

For decades, the conventional wisdom was that brokers sold about one out of five businesses they listed. But a new study by Louis O. Vescio, owner of Sunbelt Business Brokers in Melbourne, Fla., found that the percentage was only 10.5 percent. The main reason, Mr. Vescio and others said, was that “most small business owners keep bad records,” so buyers cannot get an accurate financial picture.

Only 10% of small business owners can sell their business? Most of the others have difficulty selling because they run a sloppy ship?

Read the quotes in full context at the NY Times