Biz Buy Sell, the Internet's biggest online marketplace for buying and selling businesses just released its first quarter survey results and the numbers are looking good. 

In their words, "As the economy recovers, business brokers are optimistic that both buyers and sellers will be more aggressive in the business-for-sale marketplace."  They also report that small business transactions are up 56% this quarter over 2012 and sales prices are at a two-year high.  According to their findings, this "represents the highest number of businesses sold in a quarter since the second quarter of 2008. The 56% year-over-year jump is also the largest such increase since small business sales bottomed out in mid-2008." 

How does that compare to what the restaurant brokers are seeing in the marketplace?  It is definitely on par as we have seen the following turnarounds in the first quarter of 2013.

1) Stronger pricing of restaurants for sale

Restaurant pricing took a beating over the past 4-5 quarters with multiples at the lower end of the spectrum.  The restaurant brokers are seeing a strong rebound in pricing multiples especially when we are pricing restaurants for sale with good earnings (above six figures) that can be pre-approved for lending.  That's in line with the Biz Buy Sell report citing sales prices at a two-year high.

2)  Multiple offers on strong Units

Great listings are great listings in any market but it has been a couple of years since the market was hot enough to drive multiple competing offers.  That's changing.  Last week when the restaurant brokers released a multi unit Which Wich with strong earings, we had six (SIX) offers within 72 hour.  The seller had his choice of buyers for the property.  That is a situation we would not have seen just last year.

3) Buyers that are not "waiting" on a good deal but jumping on a good deal. 

Days on the market or the time between release of a listing and the offers is decreasing.  The restaurant brokers are seeing a shortened sales cycle in all markets from Atlanta to Denver.  This indicates to us a mentality from buyers that says they are no longer sitting on the sidelines but getting into the game to make deals and also aligns with national trends.

4) Lending for buying a restaurant is back.

Banks are lining up appointments with the restaurant brokers and looking for good properties to lend on.  We have multiple bankers looking at deals to pre-approve for lending before they are ever released for sale.

The national survey released by BizBuySell found that many brokers indicate buyers have "settled down" now that the election is over and are back in the game to buy.  That's consistent with the restaurant broker findings according to Eric Gagnon, President of We Sell Restaurants who says, "2012 was a year of uncertainty.  Between the Fiscal Cliff, the Presidential Election and the lackluster Economic Indicators, restaurant sellers and buyers were sitting on the sidelines, particularly in fourth quarter. That created pent up demand that we have seen realized in the first quarter of 2013." 

Robin Gagnon added, "It's not just buyers and sellers with pent up demand.  Banks have been sidelined for several years and not really operating within the restaurant space.  That's changing however and we are seeing many lenders with an appetite for funding restaurants in the market."

According to the BizBuySell press release, brokers are optimistic and they say, "the feeling among brokers is that the remainder of 2013 will be even more successful. In the survey, 54 percent of brokers expect slight to significant improvements going forward, while a mere 13 percent expect no change from the current activity this year."

it is not all good news however as the same survey cites 2013 tax changes as a reason tht 91% of brokers state could are "either slightly or greatly deflating small business values."

The restaurant brokers are not seeing the same tax impact which could be related to the lower investment in fixed assets and inventory for this industry versus others.

On balance however, these restaurant brokers feel strongly that the market is in a strong upswing.  If you've been waiting to buy, the clock may be ticking. 

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The source document for this article can be found online at BizBuySell by following this link.   

BizBuySell is the Internet's largest business for sale marketplace. Since 1996, BizBuySell has offered tools that make it easy for business owners and brokers to sell a business, and potential buyers to find the business of their dreams. BizBuySell currently has an inventory of approximately 40,000 businesses - spanning 80 countries - for sale at any one time and receives more than 910,000 monthly visits. The site also features an extensive franchise directory as well as an easy-to-use business valuation tool. Please visit www.bizbuysell.com for more information.