January Sees 24% Boost in Californians Buying Businesses

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More Californians were involved in buying businesses last month than in January of 2009. The 24% boost in deals is attributed largely to pent-up demand and hopeful attitudes about a recovering economy.

And the supply side of the equation includes hundreds of thousands of baby boomer business owners who are getting ready to retire and to receive the equity they’ve built into their companies.

More Californians were buying businesses last month than in January 2009, according to the website that matches buyers and sellers of businesses in California. BizBen.com--businesses for sale in California, announced that 1,074 deals were concluded in the state during the just-completed month, up 24% from the 865 closed transactions recorded in January last year.

“We’re seeing the effects of pent-up demand,” said Peter Siegel, MBA, founder and CEO of BizBen.com, and an entrepreneur with a record of starting, buying and selling small businesses over the past several years.

“Buyers and sellers have been hesitating to make their moves, waiting to see how things are going to shake out in the economy. But you can’t wait forever--not if you’re an owner ready to retire now, and not if you are a buyer who needs to get involved in an enterprise that will provide an income.”

Southern California counties were consistent in showing growth when comparing January of last year to last month. For Los Angeles County the increase was nearly 29%, climbing from 227 to 292 transactions. Orange County’s increase was from 80 to 96, San Diego saw growth from 51 sales in January 2009 to 68 in the just-completed month, and Riverside County posted a gain from 16 to 25.

Northern California figures were mixed. The rate of buying businesses in San Francisco was down from 40 to 34, Alameda County activity dropped from 72 to 58, and Sacramento County sales went from 33 during January 2009 to 27 last month. Contra Costa County posted an increase to 27 transactions from 15 in January last year, and numbers were up substantially in Santa Clara County, from 30 to 83.

“It’s encouraging to look at the overall trend,” said Siegel. “One important factor is that California entrepreneurs are quite resourceful. They’re making more use of strategies such as seller financing and earnout agreements to get their deals done.

“A major problem, of course, has been the lack of the funds available from business banks that buyers need to do business. Unfortunately, a lot of buyers have seen their nest eggs evaporate and that has made it more difficult to come up with the cash and the collateral required to complete a transaction.”

Siegel said it is “too soon to tell” whether the pledge by President Obama to direct $30 billion in TARP (Troubled Asset Relief Program) funds to the small business community through local banks will “take hold like it’s intended.

“If the plan works, it could be the ‘juice’ needed to accelerate the rate of buying businesses.”

Siegel noted the long term prognosis for the small business sales market is “headed for the roof.

“When it comes to demand, we see a growing population of unemployed Americans joining the population of people who are engaged in buying businesses.

“And the supply side of the equation includes hundreds of thousands of baby boomer business owners who are getting ready to retire and to receive the equity they’ve built into their companies.”

BizBen.com has been matching people interested in selling and buying businesses since 1994 and furnishing all interested participants in the market with sales data for the past 12 years. In addition to the opportunities and information, the site contains ideas, news and a blog page for business buyers and sellers, and the business brokers as well as the other professionals who serve them.

January sales results by California County are accessed at BizBen Statistics
and are as follows:

Alameda: 58, Butte: 8, Contra Costa: 27, El Dorado: 9, Fresno: 40, Glenn: 1, Humboldt: 1, Imperial: 4, Inyo: 1, Kern: 20, Kings: 1, Los Angeles: 292, Madera: 1, Marin: 11, Mendocino: 2, Merced: 8, Monterey: 15, Napa: 9, Nevada: 5, Orange: 96, Placer: 14, Riverside: 25, Sacramento: 27, San Bernardino: 38, San Diego: 68, San Francisco: 34, San Joaquin: 30, San Luis Obispo: 15, San Mateo: 17, Santa Barbara: 12, Santa Clara: 83, Santa Cruz: 11, Shasta: 4, Solano: 9, Sonoma: 11, Stanislaus: 24, Sutter: 3, Tehama: 1, Tulare: 14, Tuolumne: 3, Ventura: 16, Yolo: 6

For more information: Peter Siegel
Phone 866-270-6278

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