In today’s ever changing business landscape, buying and selling small and mid-sized companies has become more fluid, creatively constructed and opportunistic than ever before. As someone who regularly interacts with both business owners and prospective buyers, I’ve identified some key trends that are shaping the current market. These trends reflect shifts in both seller and buyer behavior, pointing to a more flexible and strategic approach to business transitions. Below are five key trends currently influencing the process of buying and selling businesses.
1. Owners Are Starting the Selling Process at a Younger Age
One of the most noticeable trends in the marketplace is that business owners are beginning to plan their exits earlier than in the past. Traditionally, business owners might wait until their late 50s, 60s and even 70s before seriously considering selling their company. Today, however, many are starting the selling process in their late 40s or early 50s. This shift is largely driven by a desire to ensure a smooth transition, enjoy a second or third career as well as by personal financial planning considerations.
For these owners, getting a head start allows them to build a more robust exit strategy, which often includes grooming their business for a bigger sale price, identifying key successors, and even preparing emotionally for the transition. The fact is, selling a business is a monumental task, and it’s rarely just about finding the right buyer. There are operational, legal, and financial preparations that take time, and starting earlier provides owners with the opportunity to maximize the value of their business. By taking a proactive approach, these sellers are more likely to enjoy a successful and lucrative sale that secures their financial future.
Additionally, starting the process earlier allows owners to consider personal goals that extend beyond the sale. Whether it's a lifestyle change, a new venture, or even retirement, knowing that they have the freedom to make those decisions once the sale is complete gives owners a stronger sense of control over their future.
2. Increased Focus on Boosting Business Value Before Selling
Another trend that stands out is the growing number of business owners who are actively working to increase the value of their business before putting it on the market. This trend is driven by the realization that increasing EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) can lead to significantly higher sale prices. For instance, adding $100,000 to a company’s EBITDA could potentially increase the sale price by as much as half a million dollars. This kind of value enhancement can be life-changing for owners who are looking to secure their financial future.
Younger business owners are more willing to invest in their company’s infrastructure, optimize processes, and improve their market position to attract higher offers. From streamlining operations to cutting unnecessary costs, owners are making smarter decisions that yield higher profit margins and, ultimately, better sale outcomes.
Value-add initiatives may include expanding into new markets, enhancing customer retention programs, or upgrading technology systems to make the business more appealing to potential buyers. Additionally, many owners are focusing on reducing their company’s dependence on them personally, ensuring that the business can run smoothly without their direct involvement. This makes the company more attractive to buyers who may be looking for a turn-key operation.
Overall, there’s a growing awareness that the effort put into enhancing business value before selling can provide exponentially higher returns, making this a significant trend in today’s business sales market.
3. Owners Feeling Fatigued by Market Uncertainty and Operational Challenges
While some business owners are excited about growing their business before selling, others are becoming increasingly tired and frustrated with the challenges of running a company in today’s uncertain environment. From labor shortages to unpredictable government regulations, many business owners feel that the operational landscape has become too difficult to navigate. This fatigue is prompting more owners to sell earlier than they might have initially planned.
Finding and retaining staff, for instance, has become an ongoing struggle for many businesses, particularly in industries that rely heavily on labor. With the rise of automation and digital disruption, many traditional industries are facing new competition and an increased need for skilled workers. However, the labor pool is shrinking, and many qualified candidates are looking for more flexible working arrangements or higher wages, leaving small and mid-sized business owners scrambling to fill key roles.
In addition to staffing challenges, government regulations and policies have become more unpredictable. Changes in tax policies, healthcare regulations, and labor laws can all have a significant impact on a business’s bottom line, and many owners feel that the uncertainty is too great. Rather than waiting to see how things will play out, some owners are deciding that now is the right time to sell.
This sense of fatigue and frustration has become a key driver in the decision to sell, particularly for those who feel that the challenges of running a business no longer align with their long-term goals.
4. Buyers Are Holding for the Long Term and Expanding Aggressively
On the flip side, buyers are not just purchasing businesses for quick turnarounds; they are increasingly buying with a long-term view in mind. Many buyers today see acquisitions as part of a broader growth strategy, and they are taking an aggressive approach to expanding the businesses they acquire. Whether through geographic expansion, diversification of product offerings, or new marketing strategies, buyers are positioning themselves for sustainable growth.
Interestingly, this long-term view often includes keeping the previous owner on board in a consulting capacity. In some cases, owners are staying involved with their former companies for several years after the sale, offering guidance, sharing institutional knowledge, and ensuring a smooth transition for both the new owners and the employees. This allows the buyer to benefit from the seller’s expertise while pursuing growth opportunities, creating a win-win situation for both parties.
Moreover, buyers are looking beyond short-term profits. They’re focused on building value over time, often leveraging their own networks and resources to scale their acquisitions. As a result, many of these acquired companies see significant growth post-sale, which benefits both the buyer and, in some cases, the seller who might have an equity stake in the new venture.
5. Post-Sale, Many Sellers Are Returning to the Market to Buy Smaller Businesses
Finally, a growing trend among sellers is the desire to return to the market after a break. After the sale of their company, many business owners find themselves ready to re-enter the business world, but this time with a new perspective. Rather than building one large company, they are focusing on acquiring smaller businesses and building a portfolio of companies as part of their long-term investment strategy.
These former sellers have the advantage of experience, capital, and a clear understanding of what it takes to succeed in business. They often look for smaller, underperforming businesses with potential for growth, acquiring them at lower prices and using their expertise to turn them around.
In many cases, this strategy allows former business owners to enjoy the best of both worlds: the freedom and flexibility that come with semi-retirement, while still remaining engaged in the business world. It also offers a way to diversify their income streams and reduce the risks associated with having all of their wealth tied to one business.
Conclusion
The world of buying and selling businesses is evolving rapidly, and these five trends are a testament to that shift. Business owners are becoming more strategic about when and how they sell, while buyers are taking a long-term approach to growing their acquisitions. Meanwhile, the challenges of running a business in today’s uncertain environment are pushing some owners to exit sooner, and many of them are coming back to the market in new ways, ready to build portfolios of smaller companies. These trends will likely continue to shape the landscape of business transactions in the years to come, creating new opportunities for both buyers and sellers alike.
If you'd like to discuss these trends, talk about selling your company or buying a business please book an appointment with me here.
calendly.com/ericgilboord
1. Owners Are Starting the Selling Process at a Younger Age
One of the most noticeable trends in the marketplace is that business owners are beginning to plan their exits earlier than in the past. Traditionally, business owners might wait until their late 50s, 60s and even 70s before seriously considering selling their company. Today, however, many are starting the selling process in their late 40s or early 50s. This shift is largely driven by a desire to ensure a smooth transition, enjoy a second or third career as well as by personal financial planning considerations.
For these owners, getting a head start allows them to build a more robust exit strategy, which often includes grooming their business for a bigger sale price, identifying key successors, and even preparing emotionally for the transition. The fact is, selling a business is a monumental task, and it’s rarely just about finding the right buyer. There are operational, legal, and financial preparations that take time, and starting earlier provides owners with the opportunity to maximize the value of their business. By taking a proactive approach, these sellers are more likely to enjoy a successful and lucrative sale that secures their financial future.
Additionally, starting the process earlier allows owners to consider personal goals that extend beyond the sale. Whether it's a lifestyle change, a new venture, or even retirement, knowing that they have the freedom to make those decisions once the sale is complete gives owners a stronger sense of control over their future.
2. Increased Focus on Boosting Business Value Before Selling
Another trend that stands out is the growing number of business owners who are actively working to increase the value of their business before putting it on the market. This trend is driven by the realization that increasing EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) can lead to significantly higher sale prices. For instance, adding $100,000 to a company’s EBITDA could potentially increase the sale price by as much as half a million dollars. This kind of value enhancement can be life-changing for owners who are looking to secure their financial future.
Younger business owners are more willing to invest in their company’s infrastructure, optimize processes, and improve their market position to attract higher offers. From streamlining operations to cutting unnecessary costs, owners are making smarter decisions that yield higher profit margins and, ultimately, better sale outcomes.
Value-add initiatives may include expanding into new markets, enhancing customer retention programs, or upgrading technology systems to make the business more appealing to potential buyers. Additionally, many owners are focusing on reducing their company’s dependence on them personally, ensuring that the business can run smoothly without their direct involvement. This makes the company more attractive to buyers who may be looking for a turn-key operation.
Overall, there’s a growing awareness that the effort put into enhancing business value before selling can provide exponentially higher returns, making this a significant trend in today’s business sales market.
3. Owners Feeling Fatigued by Market Uncertainty and Operational Challenges
While some business owners are excited about growing their business before selling, others are becoming increasingly tired and frustrated with the challenges of running a company in today’s uncertain environment. From labor shortages to unpredictable government regulations, many business owners feel that the operational landscape has become too difficult to navigate. This fatigue is prompting more owners to sell earlier than they might have initially planned.
Finding and retaining staff, for instance, has become an ongoing struggle for many businesses, particularly in industries that rely heavily on labor. With the rise of automation and digital disruption, many traditional industries are facing new competition and an increased need for skilled workers. However, the labor pool is shrinking, and many qualified candidates are looking for more flexible working arrangements or higher wages, leaving small and mid-sized business owners scrambling to fill key roles.
In addition to staffing challenges, government regulations and policies have become more unpredictable. Changes in tax policies, healthcare regulations, and labor laws can all have a significant impact on a business’s bottom line, and many owners feel that the uncertainty is too great. Rather than waiting to see how things will play out, some owners are deciding that now is the right time to sell.
This sense of fatigue and frustration has become a key driver in the decision to sell, particularly for those who feel that the challenges of running a business no longer align with their long-term goals.
4. Buyers Are Holding for the Long Term and Expanding Aggressively
On the flip side, buyers are not just purchasing businesses for quick turnarounds; they are increasingly buying with a long-term view in mind. Many buyers today see acquisitions as part of a broader growth strategy, and they are taking an aggressive approach to expanding the businesses they acquire. Whether through geographic expansion, diversification of product offerings, or new marketing strategies, buyers are positioning themselves for sustainable growth.
Interestingly, this long-term view often includes keeping the previous owner on board in a consulting capacity. In some cases, owners are staying involved with their former companies for several years after the sale, offering guidance, sharing institutional knowledge, and ensuring a smooth transition for both the new owners and the employees. This allows the buyer to benefit from the seller’s expertise while pursuing growth opportunities, creating a win-win situation for both parties.
Moreover, buyers are looking beyond short-term profits. They’re focused on building value over time, often leveraging their own networks and resources to scale their acquisitions. As a result, many of these acquired companies see significant growth post-sale, which benefits both the buyer and, in some cases, the seller who might have an equity stake in the new venture.
5. Post-Sale, Many Sellers Are Returning to the Market to Buy Smaller Businesses
Finally, a growing trend among sellers is the desire to return to the market after a break. After the sale of their company, many business owners find themselves ready to re-enter the business world, but this time with a new perspective. Rather than building one large company, they are focusing on acquiring smaller businesses and building a portfolio of companies as part of their long-term investment strategy.
These former sellers have the advantage of experience, capital, and a clear understanding of what it takes to succeed in business. They often look for smaller, underperforming businesses with potential for growth, acquiring them at lower prices and using their expertise to turn them around.
In many cases, this strategy allows former business owners to enjoy the best of both worlds: the freedom and flexibility that come with semi-retirement, while still remaining engaged in the business world. It also offers a way to diversify their income streams and reduce the risks associated with having all of their wealth tied to one business.
Conclusion
The world of buying and selling businesses is evolving rapidly, and these five trends are a testament to that shift. Business owners are becoming more strategic about when and how they sell, while buyers are taking a long-term approach to growing their acquisitions. Meanwhile, the challenges of running a business in today’s uncertain environment are pushing some owners to exit sooner, and many of them are coming back to the market in new ways, ready to build portfolios of smaller companies. These trends will likely continue to shape the landscape of business transactions in the years to come, creating new opportunities for both buyers and sellers alike.
If you'd like to discuss these trends, talk about selling your company or buying a business please book an appointment with me here.
calendly.com/ericgilboord
