According to data from online market BizBuySell.com, the number of small businesses sold in the first quarter of 2019 dropped by 6.5% compared to the first quarter of 2018. The total number of transactions dropped from 2,678 to 2,504.
According to Business Broker Association chairman Jeff Snell, there are several factors that contribute to the decline in owners’ interest in selling their business and potential buyers’ desire to purchase companies. These include the profitability of small businesses which hold back owners from selling their companies and the low unemployment which means people are satisfied with their jobs and do not plan to have their own business.
Transworld Business Advisors of Denver president Jessica Fialkovich said the sales slowdown could continue because of problems in financing and rising interest rates.
The Federal Reserve does not plan to raise interest rate in 2019, but the four rate increases in 2018 have made it more expensive to finance business acquisitions and the weak economy may deter potential buyers from making purchases.