Drop in Small Business Sales Reported in California During April

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Last month’s count of small business sales in California declined by 38% compared to the volume recorded in April of last year. Several factors account for this dip in activity. Meanwhile, there are encouraging signs suggesting greater transaction volume in the months to come.

We still are seeing the effects of the struggling economy, and the caution signals it sends to entrepreneurs

The 1,095 small and mid-sized businesses sold in California last month represent a 38% drop in deal volume from 1,768 escrows completed in April of 2009. And there was a dip of about 6% compared to the 1,163 deals recorded in March 2010.

But these figures, reported by BizBen.com, show an uneven pattern, as the sales performance in some of the larger counties was positive compared with the state’s overall numbers.

“We still are seeing the effects of the struggling economy, and the caution signals it sends to entrepreneurs,” said Peter Siegel, MBA, the BizBen.com Founder and CEO.

“Is this the right time to buy or to sell a business? A lot of people just aren’t sure when they see some economic indicators improving while others are still reflecting ongoing problems in employment figures and lending activity.”

Despite the lagging escrow closing figures throughout California, there were improvements in key areas. Los Angeles County saw an increase in April 2010 sales to 341 deals, compared to the 306 transactions posted in March. Orange County business sales were up slightly in April with 114 completed escrows, vs. 111 posted the prior month.

Siegel noted that anecdotal evidence from business brokers and escrow officers “suggests that many people just weren’t doing business in April. Lots of families were away for spring break.

“I expect we’ll see some improvement in sales volume in the months ahead, particularly if the SBA can keep its incentive programs going so that lenders are willing to funds for small business purchases. The SBA 7(a) and 504 loan programs also have been more attractive to borrowers with a free application incentive.

“An encouraging sign is the fact that the number of businesses for sale has increased in some parts of the state. With more inventory, we’ll see improved sales volume.”

BizBen.com, founded in 1994, is one of the nation’s leading online marketplaces for small businesses and resources. Since the mid-Nineties, the company has collected and reported monthly sales statistics, broken down by city and by county. The site also is popular for its ideas, industry news and a blog page for entrepreneurs planning to sell or purchase a business opportunity. It also is a key resource for business brokers and the other professionals who assist entrepreneurs who buy and sell California businesses.

April 2010 sales results by California County (available at the BizBen.com statistics page) are as follows:

Alameda: 30, Butte: 10, Calaveras: 1, Contra Costa: 24, El Dorado: 4, Fresno: 32, Humboldt: 2, Kern: 22, Los Angeles: 341, Marin: 3, Mendocino: 3, Merced: 4, Monterey: 18, Napa: 8, Orange: 114, Placer: 7, Riverside: 13, Sacramento: 40, San Bernardino: 35, San Diego: 116, San Francisco: 30, San Joaquin: 27, San Luis Obispo: 9, San Mateo: 19, Santa Barbara: 11, Santa Clara: 65, Santa Cruz: 3, Shasta: 6, Solano: 7, Sonoma: 33, Stanislaus: 16, Tehama: 2, Tulare: 11, Tuolumne: 1, Ventura: 25, Yolo: 2, Yuba: 1.

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Peter Siegel


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