A Crippling Year For Small Business: Few Sales, Tough Cash Flow
May 27, 2008 by Douglas A. McIntyreSmall businesses think the economy is falling apart with little light at the end of the tunnel. The Discover’s Small Business Watch index of confidence showed that "only 28 percent of business owners said that economic conditions were improving for their businesses," according to Reuters.
Cash flow was a major issue, especially with bank credit hard to come by. Thirty-nine percent of the firms surveyed had cash flow problems over the last 90 days.
For small business owners trying to sell their companies, the news was probably more troubling. One of the reasons is that more and more small operations are for sale. Perhaps owners want to cash in before the downturn begins in earnest.
According to The New York Times "The country’s largest listing site, bizbuysell, has 50,000 businesses for sale — up from 43,000 this time last year, said Michael K. Handelsman, the site’s general manager.". All of that inventory is moving into a market where tapping cash to buy a company is getting harder and harder.
The only way to match motivated buyers and motivated sellers in the current small business "for sale" sector is for those selling to bring down prices. Otherwise, it is like the current housing market. Nothing moves.
Douglas A. McIntyre
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