The Buy Sell Edge Small Business M&A Market Analysis 2022 - Greater Atlanta

The looming recession, high cost of funds, and inflation have slowed the momentum from the covid rebound we experienced from Q3 2020 to Q1 2022.

HIGHLIGHTS

• Small business transaction volume decreasing and valuations dipping due to rising interest rates, inflation looming recession
• Greater Atlanta had a strong Q4, bucking the national trend
• Revenue and Cash flow for completed transactions is trending downward since their peak in Q1 2022

Small businesses and main street businesses typically feel the impacts of these conditions more than larger companies.  Interest rates increased throughout 2022.  This increased cost of funds and tighter lending climate will have a negative impact on business valuations.  I expect an increase in seller financing, earnout, and other contingent payments to bridge the valuation gaps.

Greater Atlanta Macro Economics

Greater Atlanta is a growing metropolis, expected to grow from 6.2M to 9.5M people in the next 30 years.  Only Dallas +5M, Houston +4.5M, and Phoenix +3.3M are expected to grow by more people. 

Along with population growth, financial economics are trending upward, and the popularity of the city remains strong.

SMALL BUSINESS TRANSACTIONS

Total closed transactions in Greater Atlanta increased by 9.3% compared to 4.7% nationally.  The next chart tells a story for 2022 that shows downward momentum.

National trends show a peak in Q2 2022 and 3 straight quarters of decline since.

Greater Atlanta had a strong Q4 that slightly exceeded the national Q2 peak.

SMALL BUSINESS MULTIPLES

Q4 valuations saw a significant dip. Atlanta's valuations typically do not vary far from the national average, Q4 saw a 24% dip.  Q1 2023 numbers will help us show if this was an anomaly or a trend.

MEDIAN SALES PRICE ATLANTA

The median sales price dipped sharply in Q4 after trending up over the last year.

CLOSED TRANSACTION FINANCIALS

Revenues, profitability, and valuations all declined in Q4 after having a strong run-up from Q2 2021 - Q1 2022.  Profitability (cash flows) has been declining since the Q1 peak.

If you own a business and you want to start preparing for your exit, please contact me for a free valuation and consultation on preparing your company for sale.

ABOUT THE  BIZBUYSELL.COM  2022 INSIGHT REPORT

Some of the data analyzed were taken from BIZBUYSELL.COM Insight Report.  This report compiles data from the transactions listed on the BizBuySell.com platform, the nations leading platform for the sales of small businesses.