Small business acquisitions grew 10% over the previous year and 3% over the previous quarter, according to BizBuySell’s Insight Data, which tracks and analyzes U.S. business-for-sale transactions and sentiment from business owners, buyers, and brokers. A total of 2,384 businesses changed hands in the first quarter, representing an enterprise value of $1.8 billion, which is 24% higher than the same time last year.
After a relatively flat 2023, bogged down by rate hikes and the economy teetering between recession and a soft landing, deals appear to be moving forward again. In fact, U.S. banks anticipate an increase in demand for loans in 2024, according to a recent Federal Reserve survey. That said, with inflation still above the Federal Reserve’s 2% target, comments by Fed Chair Jerome Powell indicate rate cuts are not likely to happen anytime soon.
70% of Small Businesses Say Inflation Not Easing, Labor Costs Weigh Heavy
Not surprisingly, most small businesses feel the bite of inflation, with 70% of owners surveyed saying inflation is not easing. In fact, the Consumer Price Index accelerated to 3.5% in March, marking the third consecutive strong reading. With rising operating costs, from fuel and utilities to food and employee wages, many small businesses have been forced to raise prices. Others fear losing customers.
