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Business Statistics
Size Break Down of Businesses
Very Small Business 19 or fewer
employees
Small Business 20 to 99 employees
Medium-Size Business 100 to 499
Large Business 500+ employees
How
Many Businesses Sell?
The
number we'll use for our estimate is the one mentioned
previously: 5,547,400 businesses. We'll round this off to
5,500,000, which incidentally is the same as last year. In
this figure agriculture, mining, transportation, utilities,
finance, insurance and real estate represent about 800,000
of the total. We realize that very few of these type
businesses actually are sold by business brokers or
intermediaries. We feel, however, that the 800,000 are
offset by businesses that might be sold in the categories
just mentioned, non-employee businesses, coupled with the
fact that the numbers are not quite current and the number
of businesses is growing at 2%+. The next question we are
asked right after the number of businesses that sell is how
many are sold by business brokers/intermediaries? This is
like guessing at a number and then having to guess at a
second number using the first guess. The number bandied
about is that approximately 50 percent of businesses that
actually sell are sold by business brokers. Our contention
is that there may be a large number of businesses for sale,
but the number that actually sell represents a small
portion. Also, we don't think that lawyers, accountants,
suppliers and the next-door-neighbor are involved in as many
deals as business brokers and others like to think.
Our figures are based on several premises: that about 20
percent of all businesses are for sale at any one time; and
that the smaller the business, the less likely it is to
sell.
General
Business Brokerage
Number of Businesses - 4,400,000
Number for Sale - 880,000
Number That Sell - 160,000 (1 Out Of 5)
The
Larger Business Brokerage
Number of Businesses...550,000
Number for Sale...173,000
Number That Sell...43,000(1 Out Of 4)
The
Mid-Size Company
Number of Businesses...550,000
Number for Sale...173,000
Number That Sell...49,000 (1 Out Of 3.5)
The
Large Company
Number of Businesses...54,000
Number for Sale...8,000
Number That Sell...2,500 (1 Out Of 3)
What
happens to the ones that don’t sell?
So, what happens to the approximately 1 million that don't sell? Some
are always on the market the seller is just waiting for a buyer to
come along. Many have very unrealistic expectations of what their
business should sell for. Obviously, in some cases, the owner just
plain closes the doors. According to an article in the May 2001
Small Business issue of INC magazine, a very, very small percentage
of business owners actually file bankruptcy.
Keep in mind that the number of almost 1 million means that at any
given time there are approximately 1 million businesses on the
market. Many of them sell and are replaced by new businesses on the
market. The big reason businesses don't sell is that they are
overpriced by the owner. Almost all would sell if the owners were
realistic and were willing to accept what the market is willing to
pay. Unfortunately, too many business owners think that business
brokers are magicians. But, it is the market place that determines
the ultimate value. The business may actually be worth what the
seller thinks its worth, but if no one perceives the same value of
the business it wont sell.
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