- Total transacted value was up 12% to $2.13Billion in Q3
- Service and retail sectors leading the way
- Outlook is unclear for 2026
- Buyers and Sellers need realistic expectations
BizBuySell the largest small business marketplace recently released their Q3 Insight report. The report highlighted that business sales accelerated during Q3 as sellers’ have lowered their expectations and buyers remain ready. The median sales price fell 9% quarter-over-quarter. Total transactions in Q3 totaled 2,599 worth $2.13B this was up 8% from last year’s Q3 total of 2,399.
Buyer interest in essential industries surged in the third quarter, with service and retail sectors leading the way. Transaction volume for service businesses rose 11% year-over-year, while retail acquisitions jumped 14%. A broker in Fort Lauderdale reported, “that [sales of] essential service businesses favor sellers while [sales of] discretionary and lifestyle businesses tend to favor buyers.” Despite robust deal volume both sectors saw deal flow lean toward lower priced deals tied to moderate earnings. The median sales price of service businesses fell 8% YoY to $300,000, with median cash flow down 15%.
Meanwhile acquisitions within the manufacturing sector experienced significant headwinds. Transactions fell 11% year-over-year, and the median sales price dropped 37% to $550,000. This should come as no surprise as manufacturers tend to have exposure to potential tariffs. Financials also weakened with median cash flow down 28% and median revenue down 27%. Business broker A.J. Ramsey of Transworld Business Advisors, reported, “Tariffs are affecting manufacturing and retail deals. There is a lot of variability in costs, which are fluctuating, so deals may slow down, but they are still progressing.”
Market Outlook: Growth Fueled by Motivated Buyers and Moderating Seller Expectations
The Buyer-Seller Confidence index remains strong at 52, largely reflecting expectations of improved opportunities in 2026. Overall demand is expected to remain steady as 40% of business buyers identify as “corporate refugees,” with 55% between the ages of 40 and 59. The slowing job market has contributed to making business ownership increasingly attractive. Seller price expectation are moderating, which should be a boon for acquisitions as many of them are faced with retirement (42%). However, the current government shutdown including the SBA could create a headwind for deal flow. But the Feds recent rate cut might help mitigate negative impacts from the current shutdown.
How Buyers and Sellers Can Prepare for a Successful Sale
In this competitive market buyers need to plan ahead and position themselves as strong candidates and have a clear understanding of the competition for quality businesses. Be realistic. If you find a very attractive business, get ready to compete with other buyers for it. Show sellers you are a bona fide buyer by getting prequalified with an SBA lender.
For those looking to sell in a market marked by cautious optimism, preparation is the key. Sellers must have a realistic understanding of what their business is worth, and if need be, make the necessary improvements to attract buyers. The first step should be ensuring accounting records and tax returns support their desired price. “If you are taking unreported cash, stop it now. Better yet, stop three years before you want to sell,” said Broker Charlie MacPherson of Inbar Group, Inc. in Maine.
