Is This the Right Time to Sell Your Small Business
Business is booming in New York City. The time may be right to take advantage of current positive trends to best position your company for sale in New York City. New York State has 2.1 million small businesses, making it the country’s leader for organizations that size. Especially notable is the fact small businesses make up a 99.8 percent of businesses in the state. Those small businesses increased the total number of employees by 113,528 in 2018. The largest business sectors include health care and social services, hospitality and food service, retail organizations and construction.
NYC Market Trends
New York City rates as the best location throughout the entire country for growth amongst small businesses in 2018. It also took top honors in 2017. New York’s success in small business growth is attributed to the city being the largest in the country, giving business owners access to more potential clients and customers. New York City is also a leader in tourism and the discretionary spending by visitors only helps bolster an already strong business market.
Despite strength in the small business portion of the commercial market, overall economic indicators in NYC remain mixed. For instance, apartment sales in several of NYC’s boroughs are down while commercial leasing activity and average residential sales prices are flat. On the other hand, Gross Domestic Product and job growth remain on an upswing. That leaves the market in positive territory in New York City.
Business Sales Trends in NYC
As a city with more businesses than any other in the country, New York also boasts some of the highest numbers of businesses listed and sold. In the third quarter of 2018, the New York/Northern New Jersey/Long Island metropolitan zone experienced 6,710 businesses listed for sale. Of those, the median asking price was $315,000 versus an annual revenue for those businesses averaging $676,684. The number of businesses available for sale is more than 2.5 times higher than the next highest metro area: Los Angeles/Long Beach/Santa Ana.
For the entire 2017 fiscal year, a total of 745 business sales closed, coming in at a median sales price of $290,000. Although those sales and the much higher number of businesses listed represent two different time frames, the disparity is notable. That shows how competitive the market can be for business sales, and highlights the need for business owners to find unique methods to best position themselves for a successful sale. Notably, Los Angeles experienced more business sales than New York, despite being a smaller market. However, the entire statistical area considered for Los Angeles is larger than that for NYC and could be a contributing factor.
Stand Out to Sell
In New York City, it’s not enough to position your business as a unique enterprise in attracting the customers and clients that keep the company afloat. Instead, business owners should embrace a multi-pronged approach that brings in revenue and leverages company assets to engage potential buyers, as well. “Healthier businesses are more appealing to prospective buyers,” notes industry publication BizJournals. From diversified customer bases to offering only your business can claim, standing out is extremely important. Carefully assess your own company, look at what your competitors are up to and then craft your action plan to divest your company successfully.
When you are ready to discuss the sale of your business or the find out the next steps, contact a LINK New York City business broker at infonyc@linkbusiness.com or call (914) 363-7733 today.