Average Selling Price / Days on the Market for Private M&A Deals
– Statistics Regarding Selling a Business –
If you’re a business owner considering selling his/her business, it’s helpful to know some basic statistics regarding averages for selling a business.
The following information was gleaned utilizing data from a Pratt’s Stats database, based on transactions of private companies by private buyers. The “Average Days on the Market by Asking Price” information compares how many days it typically takes a company to sell based on the business listing price.
Average Days on the Market by Asking Price
Selling Price under $150K – 190 days
between $150K and $500K – 210 days
between $500K and $1M – 225 days
between $1M and $5M – 245 days
greater than $5M – 275 days
Typically, companies took longer to sell as the asking price rose. This could be the result of a smaller
available buyer pool at higher price points.
The “Average Selling Price Discount from Asking Price by Days on the Market” information compares the average difference between the original listing price with the eventual selling price based on how many days a business took to sell. Typically, there was a greater difference between the asking and selling price the longer it took the company to sell, but the difference was very slight. While it seems the average discount from the asking price would be greater the longer the company remained on the market, there may be many sellers who refuse to accept much less than the asking price, causing the average days on the market to be greater with little impact on the discount from the asking price.
Average Selling Price Discount from Asking Price by Days on the Market
Less than 100 Days on Market – 15% Discount
100 to 250 Days on Market – 17% Discount
250 to 500 Days on Market – 18% Discount
Greater than 500 Days on Market – 18% Discount
“The Average Days on the Market by Year” examines how many days, on average, it took a company to sell based on the year. It appears that companies typically sold more quickly in the 90’s and early 2000’s compared with recent years.
Average Days on the Market by Year
1998 thru 2007 – averaged 185 days
208 thru 2016 – averaged 230 day
Obviously, averages do not apply to every business transition transaction, but it’s good for business owners to know what happens during most business transition transactions, so they don’t have unrealistic expectations.
The Summit Acquisitions Group — Business Brokers and M&A Advisors — specializes in the sale, appraisal, and financing of privately owned companies ranging in valuation from $750,000 to $25,000,000. Contact their offices in Atlanta, GA or Charlotte, NC for a free consultation.
