Way back in 2008 business brokers around the country predicted that that aging out of the baby boomer generation would result in what folks were calling the “Seller Tsunami”
In short a large group of business owners were supposed to be transition wealth and business creating a pool of acquisition targets for buyers. Well….that didn’t occur and we all know why. 2014 saw a lift in business sales of 40% and once again the pundits anticipated that wave coming again. So here we sit at the end of First Quarter 2015 and I look at the numbers and activity to gage once again where we sit with relation to the baby boomers.
The number of active listings for business brokers remains flat to last year although velocity of deals (speed of going under contract) has increased. In other words there is no uptick in the baby boomers actually going to market. However, there is a metic internal to our company that I think is worth mentioning. Being the largest Business Brokerage in Florida we have a unique insight into the data. A not publicized item is that brokers like myself are taking 3x as many appointment for initial consults and valuations. These are converting to listings as the listing volume remains flat but of note is the demographics of the clients. Almost all late 50’s to early 70’s. The wave is beginning.
When business brokers take appointments in general we know that sellers are gathering steam to make some type of decision. Life happens and as such so does life transition and your business is one of them. This fact taken in context of the “deal velocity” stat I spoke of earlier tells me that the wave is building and we will soon see inventory rise. Basic economics of that is that we will see pressure on small business prices in a negative manner. So in short…..now is the time to catch the wave of strong prices and returns before the crash of the wave and inventory drives sales prices down