Sales of small businesses are taking more time to close as buyers and sellers voice concerns over the effects of tariffs and global uncertainty grows.
Businesses sat on the market for a median 198 days, a 15% increase compared to the first quarter a year earlier, according to the latest insight report from BizBuySell, an online marketplace for U.S. small businesses owned by CoStar Group.
As the Trump administration took office in January and announced new tariff policies, the number of transactions declined 5% in February and fell another 2% in March, according to the findings. Some businesses still drew higher prices, the report said.
BizBuySell's insight report analyzes sales and listing prices of small businesses and serves as an economic indicator of the health of the U.S. small business economy. The sales of small businesses tracked by BizBuySell often include their real estate such as gas stations, car washes, dry cleaners and restaurants.
Even with the longer time for deals to close, buyers in the first quarter were focused on high-quality businesses and were willing to pay a premium, with the median sales price for a small U.S. business up 4% year over year to $349,000, BizBuySell found.
There were 2,368 small businesses swapping hands last quarter for a total enterprise value of over $2 billion, a 9% increase in value from the first quarter of 2024, according to the report.
The median sales prices for the category of manufacturing businesses that include metal products, machinery, lumber and furniture producers were up 54% over the past year to more than $1 million, BizBuySell said.
The timing of the increase in prices for these manufacturing businesses that tend to be larger investments suggests growing interest in reshoring manufacturing operations, BizBuySell said.
Brokers reported an increase in these types of deals as a result of shifting U.S. trade policy in the first quarter.
“High demand for domestic manufacturing capacity to offset the impact of tariffs on imported goods” led to significantly more transactions at PNW Business Brokers in Oregon from the same time last year, according to Raymond Dowd, managing partner and principal broker at the firm.