WHAT ARE THE TOP 5 SECTORS IN SMALL BUSINESS SALES? (SMB BUSINESS SALES)

WHAT ARE THE TOP 5 SECTORS IN SMALL BUSINESS SALES? (SMB BUSINESS SALES)

According to BizBuySell, the top five sectors in small business sales are the service, retail-other, retail-restaurant, other, and manufacturing sectors. Over the last few years, the service sector has been accounting for the highest number of small business sales in the United States. A detailed overview of the research findings and the research strategy follows below.

Top Industries in Small Business Sales

  • According to BizBuySell data for the second quarter of 2020, the top 5 sectors in the sale of small-sized businesses in the United States are service, retail-other, retail-restaurant, other, and manufacturing.
  • In q2 2020, there was a total of 1,481 small business sales transactions. The sectors above accounted for varying percentages in q2 sales by sectors i.e. service – 44%, retail-other – 22%, retail-restaurant – 18%, other – 13%, and manufacturing – 3%.
  • As yearly figures from BizBuySell were unavailable, the q2 figures from 2019 and 2018 were analyzed to get a sense of how the top sectors in small business sales have been changing over the years.
  • In q2 2019, there was a total of 2,444 small business sales transactions. The sales by sector was segmented into: service – 38%, retail-other – 23%, retail-restaurant – 23%, other – 12%, and manufacturing – 4%.
  • In q2 2018, there was a total of 2,705 small business sales transactions. The sales by sector was segmented into: service – 38%, retail-other – 27%, retail-restaurant – 22%, other – 8%, and manufacturing – 3%.
  • From the above analysis, it was concluded that the sales percentage of each of the major sectors has been relatively stable over the years.

Research Strategy:

After conducting an exhaustive search for the requested information, we were only able to find the top sectors/industries that have the highest number of small-sized business sales in the United States. This is because similar information for medium-sized businesses was unavailable in the public domain. However, because small-sized businesses currently account for 99.9% of all businesses in the country, we figured that the top industries in the sale of small businesses only will provide an equally clear picture of what is happening in the market. Our research was primarily focused on private business statistical resources such as BizBuySell, which maintains a database of all the business sales that take place in a particular year. Even though we were able to find reports that contained useful segmentation information, data for medium-sized businesses remained unavailable. We attributed the lack of information for medium-sized businesses to the specific nature of the targeted information as available information mainly focused on the sale of small businesses.

SMB Business Sales: Annual Sales

A total of 9,746 small businesses were sold in the United States in 2019. This figure actually represented a 5.5% decrease in sales number from 2018 where a total of 10,312 small businesses were sold. A detailed overview of the research findings and the research strategy follows below.

Small Business Sales 2019

  • According to the Small Business Administration, there were 30.7 million small businesses in the United States in 2019. This number accounted for 99.9% of all businesses in the country in 2019
  • BizBuySell has “one of the largest databases of sale comparables for recently sold businesses” in the United States.
  • According to BizBuySell, a total of 9,746 small business closed sales were reported by brokers in 2019. This represented a 5.5% decrease from the 10,312 sales reported in 2018.
  • The sales figure above can be broken down into individual quarters of 2019 i.e. q1 – 2,504, q2 – 2,444, q3 – 2,454, and q4 – 2,340.

Small Business Sales Year-Over-Year Analysis

  • In 2019, a total of 9,746 small business closed sales were reported in the United States while in 2018, a total of 10,312 sales were reported.
  • In 2017, a total of 9,919 small business closed sales were reported while in 2016, a total of 7,842 sales were reported.
  • In 2015, 2014, and 2013, 7,222, 7,494, and 7,056 closed sales were reported respectively.
  • From the available information, the closed sale of small businesses went up in the 2013-2014, 2016-2017, and 2017-2018 periods.
  • In the 2016-2017 period, the sales featured a growth of 26% while in the 2017-2018 period, the sales figure exhibited a growth of 4%.
  • In the most recent 2018-2019 period, the sales figure exhibited a decrease of 5.5% year-over-year.

Calculations for the growth rate of small business sales presented above follows below:

  • 2016-2017 = ((9,919-7,842) / 7,842) x 100 = 26.4% ~ 26%.
  • 2017-2018 = ((10,312-9,919) / 9,919) x 100 = 3.9% ~ 4%.

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