Posted on Mon, Oct. 06, 2008
last updated: October 06, 2008 07:26:45 AM
When Gennaro Mungaro put his North Lauderdale farmer's market up for sale, he figured selling would take six months.
It took a year.
A weak economy and credit crunch are making selling companies harder. Florida is on pace to experience a double-digit drop in business sales over last year, figures from Business Brokers of Florida show. The dollar volume of deals is on pace to be off by a third.
Fort Lauderdale's Transworld Business Brokers, one of the state's largest business brokers with 10 offices, says the number of deals it has brokered this year has held fairly steady compared with last year. But the dollar volume tumbled nearly 31 percent through the first eight months of the year.
A slumping economy means fewer healthy prospects. ''A lot of the businesses that we're selling, we're selling at lower prices because they have marginal profits or they are distressed,'' says Transworld's chief executive Andrew Cagnetta. Examples include pizza parlors and hair salons that make $50,000 or less, he says.
Transworld's commission typically ranges from 2 percent to 12 percent, depending on the size of the deal, with a minimum $15,000. ''We have collected a lot of minimum commissions these days, which means the businesses weren't worth more than $100,000,'' Cagnetta says.
John Preston, managing partner of Wellstone Group in Miami, says he routinely sees businesses with revenues that have dropped 30 percent to 60 percent because of the downturn. For instance, a furniture and decorations distributor's sales have fallen from $1.7 million to $800,000. A shoe importer's sales have been cut in half to $1.5 million.
Read the complete story at miamiherald.com