DFW's Economic Climate
The Dallas-Fort Worth metroplex hosts a booming economy that the Federal Reserve says is “growing at a blistering pace.” During the first five months of 2018, North Texas employers added a total of 55,000 new jobs. Those jobs aren’t clustered in just one or two industries or amongst the top retailers, either. Rather, economic expansion is “broad-based, across all sectors,” explains Laila Assanie, a Federal Reserve economist. The top industries experiencing expansion include construction, healthcare, technology and financial organizations.
Dallas-Fort Worth Market Trends
The DFW metroplex population topped 7 million in recent years, encompassing a triangle between the two largest cities and a third, Denton, at the apex. Other large cities within the metro area include Arlington, home to both the Texas Rangers and Dallas Cowboys, and Irving, a revitalized city known for its hospitality industry and growing tech center. The area’s economic indicators show that the commercial market is experiencing the same continuous growth that has defined the region for nearly two decades.
In addition to native industry growth, many companies headquartered elsewhere in the United States have identified the North Texas region as the best to relocate existing commercial operations or launch new locations. Companies find the DFW area so welcoming due to its business-friendly practices plus lower taxes and cost of living. Dallas is attracting new development and adding new jobs faster than any other metro area in the country and subsequently boasts on having one of the lowest rates of unemployment.
Business Sale Facts and Figures for DFW
In addition to the many new businesses or franchise locations coming to DFW, the local market also features a robust selling-and-buying market. In the fall of 2017, the small-to-medium size business market reached its all-time record high sales rate. As a part of that record, 96 different businesses changed hands in Dallas, Fort Worth, Arlington and their suburbs. That represents a 24 percent increase from prior years. Throughout the first three quarters of 2017, a total of 1181 businesses of all sizes changed hands.
Amongst the small organizations that sold, the top three verticals included service industry companies, retail establishments and restaurants. Those three categories accounted for 88 percent of all business sales through those three quarters. Business owners in those three areas also experienced relatively high sales prices, getting 92 percent of asking price. Those positive trends have extended into 2018, with another 81 small business sales in just the first quarter. The sales came from the 12 counties that comprise the DFW area.
How Sellers Capitalized on Business Sales
As you look to sell your own DFW business, understanding the valuation on those already sold can help you best position your own company to find success in sales. The Dallas Morning News reports that some of the recent sales include:
- A Thai restaurant that sold for $85,000
- A commercial sign manufacturer that sold for $2.6 million
- Restaurants that sold for a median price of $152,000
- Retail locations that sold for a median price of $325,000
- Manufacturing plants that sold for a median price of $750,000
- Service organizations that sold for a median price of $150,000
DMN writer Maria Halkias advises those considering placing their business for sale look carefully at timing before selling. She gives the example of a business whose sales declined due to the proprietor's battle with cancer and the fact that declining finances meant that he’d receive less for the sale than if he had divested that organization in years prior when sales were still strong.
Market indicators show that growth in both sales volume and valuation is expected to continue. Before you put up a “for sale” sign, ensure your in-house matters are adequately addressed, your books are in order for examination by potential buyers and you’re positioning yourself as a valuable investment. Through careful preparation and analysis, you can best price your organization to sell quickly and net the highest possible sales profit.
If you want to discuss selling or buying a business contact LINK Business Dallas to discuss the next steps at infodfw@linkbusiness.com or call (214) 710-2558.