Results matter…period. I am always fascinated by the consumers decision making process with regard to how they make decisions in the buying cycle. The mystery is ever more baffling when it comes to my own industry. But in hindsight I guess given the massive quantities of information (Good and Bad) and the enormous quantities of “experts” giving advice one can’t fault the consumer for making bad decisions. I hope the information I am about to provide enlightens you all with regard to the small business sales market in Florida. The following stats are drawn directly from the Business Brokers of Florida MLS system…my comments of course are opinion only and shall be highlighted:
1. Avg Sales price in 2012 – $235114…..2013 – $240948
2. Median Sales Price in 2012 – $130,000…..2013 – $125000
3. In 2012 there were 900 business brokers in Florida and there were only 867 businesses sold ( .96 deals per broker) / in 2013 938 business brokers and 899 deals sold (.95 deals per broker)
4. In 2013 43% of all deals were for less than 100k
5. In 2013 26% of the deals were between 100 to 200k
6. The average broker sells between 10% and 15% of their listings
These statistics should cause brokers, buyers and sellers a moment of pause but what is shocking is that the % and ranges have been consistent for years. Suffice it to say there are some maxims and take away items that i draw from the data. They are as follows:
1. If a business broker tells you he or she only does big deals the reality is its nonsense. Economically you cannot run a practice doing so. There simply is not enough volume of large deals and financially it makes no sense to be only in one sector. One of the fundamental flaws of any business is to be one dimensional in offering or customer base…..barring the economics would you really choose someone who makes a fundamental error in the running of their own practice to handle the sale of your business?
2. A simple question you should ask each broker is how many deals did they do the last year or so. Given the stats above whereby most don’t even get one done I wonder why you would engage someone with that level of execution?
3. Industry norm for successful sales nationwide is 25%. Stats are a funny thing but the 15% performance benchmark when normalized as a function of the recession after effects is probably more like the national average of 25%. Ask your broker their success rate….if they don’t know it or the national average you should wonder about their seriousness in the profession.
Numbers matter, results matter, the sale of your business is not easy and given the stats above I would hope you would not make a price based decision when engaging a professional business broker