Business

Data KC: Buying a business is good business here

If you want to buy a business, take heart: More than 150 were for sale in the Kansas City area at the end of 2015, and that was just those listed through BizBuySell, an Internet marketplace.

Fewer businesses changed hands last year than in 2014 through the company’s listings, both nationally and in the Kansas City market, said Bob House, general manager for BizBuySell. But he sees that as a sign of a stabilizing market, rather than any weakness, after particularly active markets in 2013 and 2014.

“The key financial and fundamental measures were stronger for the businesses that sold,” he said last week in an interview. That meant they had higher median revenue and cash flow.

  

For all of 2015, BizBuySell recorded 31 area business sales at a median price of $341,250, up 24 percent from a year earlier. The median sale is the one right in the middle — meaning half of the other businesses’ sale prices were higher, and half were lower. The median seller got 91 percent of its asking price.

Those 31 sales were a fraction of the market for private businesses, and BizBuySell doesn’t claim to track the majority of sales, especially in a medium-sized market such as Kansas City. But brokers do use BizBuySell to list hundreds of area businesses, and thousands across the country. Many brokers regard it as the largest slice of the market that’s reported transparently.

It splits sales into five categories of businesses: restaurant, retail, service, manufacturing and other. Last year in Kansas City, the high-dollar category was manufacturing, with a median sale price of $912,500. The lowest was the restaurant category, with a median sale price of $170,000. Retail’s median was $297,500, and service’s was $301,250.

The company also lists examples of sales closed in the past year, though without the names of the companies. One of the lower-price examples was a yoga studio that went for $150,000, just two-thirds of its asking price. One of the bigger sales listed was a heating and air-conditioning company that went for its asking price of nearly $1.5 million.

Greg Hack: 816-234-4439, @GregHack

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