Small business sellers get realistic about prices

7/14/2011

The recent $123 million loan issued by the U.S. Treasury Department as part of their Small Business Lending Fund supplied six banks with capital to issue to smaller companies in need to startup funds.

However, many small business owners are still feeling the strain for the economy and as a result more owners are selling their companies for less money.

According to The Wall Street Journal, many business owners have come to the realization that their companies are no longer worth what they were prior to the recession.

"Sellers are finally starting to come to grips with the fact that it's not 2007," Stephen Wain, president of Tinton Falls, New Jersey-based brokerage firm Calder Associates, told the news source. 

This has led many owners to sell their companies at a discount. The median asking price for small businesses in the second quarter of 2011 dropped $10,000 - from $249,000 to $239,000 - over the past year. 

However, AccountingToday points out that small businesses account for roughly 60 percent of gross job creation. So, as long as companies are changing hands instead of going under, it's still a positive sign for the economy.