- Total transacted value up 9%, Exceeds $2Billion in Q1
- Manufacturing Sale Price Surge 54% on Onshoring Trend
- Demand Remains Strong , but Tariffs Slow Deal Speed
According to BizBuySell, the largest online database of businesses for sale, the volume of small business acquisitions in Q1 2025 (2,368) held steady year-over-year and rose 2% compared to the fourth quarter of 2024 (2,315). The increased volume was likely driven by optimism around lower taxes, reduced interest rates, and fewer regulations anticipated in the near term.
The year started off strong in January, but the threat of tariffs appeared to slow momentum during February and March. Transactions slowed, with a 5% decline in February followed by another drop of 2% in March. Deals also took longer to close, with median days on the market increasing from a median of 198 compared to 172 a year earlier.
“Tariff announcements have added a layer of uncertainty for both buyers and sellers. While not halting deal flow, they have increased costs for import-reliant businesses and caused some buyers to scrutinize financials more carefully. Sellers in affected industries may see slightly lower multiples or longer time on market as buyers assess future risk,” said Kinzie Jones of Sunbelt Business Advisors.
Still overall market sentiment remained positive as buyers in Q1 remained focused on high-quality businesses. The median sales price was up by 4% and median revenue rose 3%. Cash flow was also up 6% compared to last year. Manufacturing saw an even bigger increase with a 54% increase in median sales price year over year reaching $1MM. Median cash flow was up to $345,831 and revenue jumped 64% to $1,704,500. According to a partner at one advisory firm, High demand for domestic manufacturing capicity to offset the impact of tariffs on imported goods” led to more deals.
Stable or growing business with steady margins and somewhat shielded from AI or potential tariffs are seeing a lot of interest. As one advisor said, “buyers will flock left and right.” The same advisor indicated if you are in a business that is likely to be disrupted by innovation or tariffs it may be a fairly difficult year. Click here to read the full article.
