45 Surprising Statistics on Small Business Sale Rates

Looking to sell your small business or just curious about the state of small business sales?

Here are 45 surprising statistics about small business sale rates in 2024.

Table of Contents

Key Small Business Sale Rates Statistics

Here’s what you definitely need to know:

65% of small businesses report profitability (Guidant) – Profitability is a key driver of business value, making this a crucial statistic for determining the health and potential sale price of a business.
Only about 20-30% of businesses listed for sale actually sell (Small Biz Genius) – This highlights the difficulty of successfully selling a business and underscores the importance of a well-prepared sale process.
45% of small businesses fail within the first five years (Tidio) – This is a critical factor that affects the long-term value and survival of small businesses, impacting the overall sales market.
The median sale price for small businesses was $375,000 in 2024 (Biz Buy Sell) – This provides a key benchmark for small business valuations, helping business owners understand the market’s expectations.
Businesses with clear exit strategies tend to sell more successfully (Tidio) – Having an exit strategy significantly increases the chances of a smooth and profitable sale, making this a vital factor for business owners considering selling.

Sale Rates and Valuations

In the U.S., small business sales are still active, with over 10,000 sold in 2018, led by industries like restaurants (17%) and retail (14%).

Despite contributing 44% to the nation’s GDP and an average revenue of $60,000, small businesses face significant valuation challenges due to inflation and economic instability, with 56% of owners citing inflation as their top concern.

Real estate, construction, and professional services continue to dominate the landscape, driving much of the gross output for small businesses.

Approximately 10,312 small businesses were sold in the United States in 2018 (Small Biz Genius).
Businesses in the restaurant industry had the highest sales rate, accounting for 17% of all small business sales (Small Biz Genius).
The retail industry accounted for 14% of small business sales, followed by service businesses at 12% (Small Biz Genius).
The average revenue for a small business in the U.S. is about $60,000 (Tidio).
Small businesses contribute 44% of U.S. GDP (Tidio).
Inflation is the top concern for 56% of small business owners, impacting profitability and sale valuations (U.S. Chamber of Commerce).
17% of small business owners report revenue loss due to economic instability, affecting valuations (Guidant).
Real estate, construction, and professional services lead gross output for small businesses (Bureau of Economic Analysis).

Factors Affecting Sales

Small business sale rates are influenced by multiple factors including owner demographics, financial performance, and industry trends.

With many owners over 50 looking to retire, and profitable businesses in sectors like real estate and construction commanding higher valuations, market dynamics are shifting.

Trends like AI adoption and digital investments also shape buyer interest and sale potential.

Owner Demographics

Small business ownership in the U.S. is dominated by experienced entrepreneurs, with 58% of owners over 50 years old. Most businesses are small, with 85% employing fewer than 20 people, and 73% of owners report a high level of satisfaction with their work.

Women own 42% of small businesses, and many owners view political gridlock as a major concern for business growth.

58% of small business owners are over 50 years old, indicating many may look to sell in the coming years (Small Biz Genius).
About 85% of small businesses have fewer than 20 employees (Tidio).
The majority (73%) of small business owners report being either somewhat or very happy with their businesses (Guidant).
Women own about 42% of small businesses (Guidant).
Over 50% of small business owners are aged 50 or older (U.S. Chamber of Commerce).
17% of small business owners incorporate AI in their operations (Guidant).
The education sector has a lower percentage of AI usage, with only 1.2% using it (Guidant).
84% of small business owners view partisan gridlock as a significant issue impacting business growth (U.S. Chamber of Commerce).

Financial Performance

Financial performance plays a huge role in business sales, with companies generating between $500,000 and $1 million in annual revenue selling faster than others. Rising operational costs, inflation, and cash flow issues are top concerns for small business owners, impacting both pricing strategies and profitability.

Sectors like construction lead gross output, but uncertainty about business survival affects 18% of owners, particularly those facing challenges such as increased wages and capital constraints.

Businesses with annual revenues between $500,000 and $1 million tend to sell faster than smaller or larger companies (Small Biz Genius).
The average small business sold in 2018 had annual revenues of $531,653 (Small Biz Genius).
Cash flow issues and lack of capital remain a top concern for 16% of business owners (Guidant).
Rising operational costs affect 29% of small business owners (Guidant).
Over half (53%) of small business owners reported that inflation has significantly impacted their pricing (U.S. Chamber of Commerce).
A 44% increase in hiring is expected within the next year (U.S. Chamber of Commerce).
The construction sector leads the gross output among small businesses (Bureau of Economic Analysis).
18% of business owners report being unsure of their business survival (Guidant).
Increased wages have become a challenge for 11% of small business owners (Guidant).

Industry Trends

Industry trends also have a significant impact on business sales, with online and technology businesses attracting increased buyer interest and higher sale prices compared to traditional brick-and-mortar companies.

Manufacturing businesses also tend to receive higher valuations, while sectors like professional services and construction continue to dominate small business output. These trends are reshaping the market, influencing both sale prices and buyer demand.

Online and technology businesses are seeing increased buyer interest, with sale prices rising faster than traditional brick-and-mortar businesses (Small Biz Genius).
Manufacturing businesses tend to command higher sale prices compared to service-based companies (Small Biz Genius).
Professional services and construction dominate small business output (Bureau of Economic Analysis).
Business services, lodging, and education industries represent less than 7% of surveyed industries (Guidant).
AI usage is expected to grow across industries, though currently only 17% of small businesses use it (Guidant).
Business expansion and remodeling are planned by 17% of small businesses (Guidant).
Marketing and digital investments are prioritized by 18% of business owners (Guidant).
Inflation has been the top concern for small businesses over the past nine quarters (U.S. Chamber of Commerce).

Sale Process

Selling a small business is often a lengthy process, typically taking 6-9 months, with 90% of owners unable to complete the sale without professional assistance. Larger businesses with over 100 employees tend to sell for higher valuations, while industries like professional and scientific services see faster sales due to strong demand. However, political and economic uncertainty and inflation add complexity to the selling process.

On average, it takes 6-9 months to sell a small business.
90% of business owners who try to sell their company without professional help fail to complete the sale (Small Biz Genius)
Businesses with over 100 employees tend to sell for higher valuations due to economies of scale (Tidio).
Recruitment and retention have dropped from being top concerns, but still affect 19% of small businesses (Guidant).
Businesses in professional and scientific services tend to sell faster due to higher demand (Bureau of Economic Analysis).
Interest in buying or selling businesses increases as inflation and economic factors become major concerns (U.S. Chamber of Commerce).
Political and economic uncertainty increases the difficulty of selling small businesses (U.S. Chamber of Commerce).

Conclusion

Small business sales are influenced by several key factors, including profitability, owner demographics, financial performance, and industry trends.

65% of small businesses report profitability but only 20-30% of those listed for sale successfully find buyers, highlighting the challenges in the sale process.

Inflation and economic instability are top concerns for owners, impacting valuations and saleability. Industries like online businesses, manufacturing, and professional services are seeing higher demand and quicker sales and businesses with a clear exit strategy or professional help sell faster and more often.

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