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Business

Small-Business Sales Rate in Santa Barbara County Outpaces Last Year

The total of 169 small and midsized businesses sold in Santa Barbara County so far this year leads last year’s total to date by 32 deals, according to the BizBen Index, which compiles and reports on this key indicator of the state’s economic health.

“It’s a hopeful sign that the business sales rate is improving, but we still have a long way to go before this market recovers,” said Peter Siegel, MBA, founder and president of BizBen.com, parent of the BizBen Index.

He noted that the rate of sale of restaurants, retail stores, service businesses and other companies in the state “tells us how effectively the market is facilitating the transfer of small businesses to a new generation of owners, and enabling sellers to retire or move on to other enterprises.”

Although year-to-date sales performance in Santa Barbara County exceeds the total at this time last year, BizBen Index figures show the sales rate lagging behind the volume of deals recorded in the county at this point in 2008.

“The total was 231 for the first 10 months of that year, right before the market went off the cliff,” Siegel said. “The reduction in activity means a lot of potential business buyers and sellers in the county have been unable to achieve their goals.”

The deal count in Santa Barbara County last month was 11, with seven of them taking place in the City of Santa Barbara.

Siegel noted that California recorded 1,395 small-business sales last month, an increase of 6.7 percent over the 1,307 total posted in October of last year. But he said a year-to-date count of transactions completed in the state total 12,024, a drop of 36 percent from the pre-recession total of 18,665 sales recorded in the first ten months of 2008.

“Some buyers, owners/sellers and professionals who work in California’s business for sale marketplace are waiting for things to return to what they call ‘normal.’ Others are fearful that a lower level of sales activity will be with us for a long time — that fewer people will be able to share in the American dream of business ownership,” Siegel said. “What has people worried is whether we will continue to find it challenging to get funding needed for business purchases, and whether the mood of uncertainty about the future will keep discouraging people from making decisions.

“A lot of would-be entrepreneurs don’t realize that the underlying forces — both demand and supply — are in place for a sizable boom in sales activity, not only in the county and the state, but throughout the country. But many buyers, sellers and their advisers don’t understand we now are working in a New Economy. That means entrepreneurs able to adapt to new realities in the marketplace with fresh strategies, will be the winners of the future when it comes to buying and selling small and mid-market California businesses.”

California’s October sales numbers by county can be viewed by clicking here.

— Peter Siegel is the founder and president of BizBen.com.

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