Rising small business sales likely to continue in 2014
Roy Hansen, owner of the Northern Colorado Truck Driving Academy, watches a Commercial Driver's License test taker parallel park on his school grounds in Fort Collins, Colo. Hansen, who turns 69 in April, just put his school up for sale.
The business of selling businesses has long been fickle. But this year is shaping up to be a particularly active year.
Take Roy Hansen: for almost two decades, Colorado’s aspiring big rig drivers have turned to his Northern Colorado Truck Driving Academy for training.
“This is a tractor truck and trailer now he’s parallel parking here,” says Hansen as he watches a customer back up the vehicle. “It takes some experience to do this. You can’t just wing it.”
Truck-driving jobs are in high demand because of increased construction in the region and clean up from Colorado’s floods last year. With a thriving business Hansen’s now focusing on retirement. This month he put his school up for sale with a broker.
“I turn 69 next month. And you know, it’s just time to do it,” he says.
A growing number of boomers are eyeing retirement now. Those who own small businesses and want to cash out have had to be patient since the last recession. This is where brokers who match buyers and sellers can help out.
“There’s always a three-year look back. The banks want to see three years financial statements, the buyers want to see three to five [years],” says Ben Mahrle with Mountain States Business Brokers Group.
Mahrle explains there’s often a lag between an economic recovery and the ability of business brokers to close deals. “If the most recent year -- or the most recent two years -- are in decline, you’re not going to get the loan. End of story,” he says.
That picture has changed. Last year the popular online marketplace Bizbuysell.com reported a 49 percent jump in small business sales. Scott Bushkie, a board member with the International Business Brokers Association, says this year could be even better.
“Kinda the perfect storm,” he says. “You got more buyers with a lot of cash. You’ve got more baby boomers coming out into the marketplace, and financing is getting more aggressive each and every day.”
As a broker himself, Bushkie says he’s starting to see interest from business owners who first tried to sell around the Great Recession. He says they have the feeling now is a great window of opportunity.