Business Acquisition Activity Finished Strong in 2021
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What happened in 2021
Many business owners faced pandemic burnout in 2021 and decided to sell whether they were at retirement age or not.
According to the Insight Report, 2021 has been the year of recovery, resilience, and renewal.
After modest gains at the beginning of the year, transactions accelerated by mid-2021, and by a whopping 28% in Q4. There were 8,647 small business transactions reported in 2021, compared to 7,612 in 2020.
Many savvy buyers found resilient businesses even amongst the horrific labor, safety, and supply chain restrictions.
Sales prices also increased by 16% as buyers were eager to leave corporate America in the Great Resignation and took advantage of eager lenders with historically low-interest rates.
Future expectations
With consumer behavior changed by the pandemic, buyers are now considering new ways to grow existing businesses.
Despite the headwinds of business growth and talent, most companies expect their revenues to be healthy and to see employee growth this year.
The demand for businesses with solid financials is strong, and buyers are willing to pay a premium to acquire these businesses.
We at Wright Business Advisors already have two businesses in contract this year and expect to see an increasing number of transactions in 2022, as more Baby Boomers decide to retire, and sellers that stayed on the sidelines and worked on their financial performance will be returning to the market.