As Value Builder System advisers we are pleased to provide you with access to the latest global data on private business trends.
In this post we bring you the key findings from the Value Builder System’s latest Sellability Tracker report.
The Sellability Tracker is a quarterly study which tracks worldwide trends in the liquidity and value of private businesses. The latest Sellability Tracker report analysed data from over 20,000 users of the Value Builder System from around the world for Q1 of 2016.
The findings in the Sellability Tracker report present an interesting snapshot of the current value and liquidity of private businesses.
Here are the two key highlights:
The Business Liquidity Index has dropped to its lowest point
Each quarter, the Sellability Tracker measures the proportion of business owners that received an offer to buy their business and expresses that proportion as an index, 100 being the average (the Business Liquidity Index).
The Business Liquidity Index slipped from 90.9 to 81.8 for the quarter ending 31 March 2016, showing that, compared to the previous quarter, a smaller proportion of business owners received an offer to buy their business.
This is the lowest point the Business Liquidity Index has reached since the Sellability Tracker started several years ago.
Average offer multiple slipped to 3.55 times pre-tax profit
Moving in lockstep with the Business Liquidity Index, the average offer users of the Value Builder System received in the last quarter dropped from 3.64 times pre-tax profit in Q4 of 2015 to 3.55 times pre-tax profit in Q1, 2016.
The latest data shows a slight softening trend in the market for privately held businesses. Therefore, if you’re planning to sell your business in the next few quarters, we recommend you do everything possible to maximize its value, focusing on the eight Value Builder System value drivers that buyers care about most.
For a full copy of the Sellability Tracker report for Q1 of 2016 click here.