One or the benefits of owning a privately held corporation is that you are private. So information regarding small privately held small businesses that are sold and bought is both minimal and hard to obtain, because of the private nature of the transactions.
I am a member of the Business Brokers of Florida (BBF) , which is the 2nd Largest Association of Business Brokers in the World. I have for my own purposes reviewed and evaluated Business Sales Activity in Florida, (figures obtained via BBF websites) along with trends of businesses sold in Florida, cash flows, and business values of those sold by members of the Business Brokers of Florida These numbers involves thousands of businesses over several years. As I plan going forward, for my business broker activities, understanding these trends and activities is one of my 1st steps in my planning process.
Here are some figures and observations:
The number of businesses sold in Florida in 2010 were 5% less than 2009. The Price for a business was sold for in Florida in 2010 was lower than 2009. Both 2009 and 2010 were down years in the business acquisition and sales market in Florida. Most business brokers I speak to believe business acquisition activity will increase in 2011.
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| 2009 – 910 Florida Businesses Sold |
| Sales | Sold Price | Adjusted Net | Days on Market | |||||
| 594,449 | 270,327 | 106,251 | 233 |
More Restaurants are Sold in Florida than any other type of Business. Accounting for over 20% of all Florida Businesses Sold by Members of the Business Brokers of Florida. Do you wonder why so many restaurants sold? Currently, As of today- 693 Restaurants are for Sale in Florida thru BBF Members. !!
Restaurants 2009 Averages |
| Sales | Sold Price | Adjusted Net | Days on Market | |||||
| 361,493 | 162,087 | 72,703 | 211 |
It could just be me, but I do speak to a lot of business owners that “feel “their business is worth $1,000,000. Only 4% of all business sold in Florida thru members of the Business Brokers of Florida were greater than $1M. Florida business climate, while having some diversity, is very strongly service based with a lot of small businesses with 10 employee or less.
Businesses Sold in Florida for $1,000,000 or More (38 Total or approximately 4% of all sales)
| 2010 Averages (38 Total or approximately 4% of all sales) |
| Sales | Sold Price | Adjusted Net | Days on Market | |||||
| 2,739,402 | 1,894,700 | 576,038 | 378 |
| 2009 Averages |
| Sales | Sold Price | Adjusted Net | Days on Market | |||||
| 2,748,466 | 2,132,351 | 574,604 | 391 |
Please Note – and this is an important fact – the Days on Market does not included businesses not sold and ultimately taken off the market.
2010 was a difficult year in the business acquisition and sales market in Florida. Last Wednesday I attended an educational seminar that was attended by 70 plus professionals in the Florida business acquisition and business sales market. Generally most all I spoke to were both guarded yet optimistic about the industry prospects for 2011.
The above numbers speak to averages. All businesses and industries have their own uniqueness. Businesses generally are sold as a multiple of their adjusted cash Flow (adjusted cash flow attempts to determine actual cash the business generates for discretionary expenses, owner wages, debt service etc.)
Each business and industry will demand a different valuation. Determining your business value may be dependent upon what similar businesses in your same industry are selling for as a multiple of adjusted cash flow. If you would like to know what businesses similar to yours are selling for, review a website such as mine, or contact a trusted business broker or other trusted advisor.