The U.S. small business market showed steady resilience in the first quarter of 2025, according to BizBuySell’s latest Insight Report. A total of 2,368 small businesses were sold, generating over $2 billion in enterprise value, a 9% increase over the same period last year. Median sale prices climbed 4% year-over-year to $349,000, as buyers remained active despite rising prices and new tariff concerns.
Deal volume grew 2% compared to the previous quarter, bolstered by an early-year rebound. Transactions rose 4% in January, driven by optimism surrounding anticipated tax cuts, lower interest rates, and deregulation efforts. However, momentum slowed later in the quarter due to policy uncertainty under the new administration. Transactions fell 5% in February and another 2% in March, while the median time to close a sale increased 15% year-over-year to 198 days.
New tariff announcements from President Trump added complexity to the market, particularly for businesses reliant on imports. Thirty-seven percent of business owners reported higher costs from tariffs, with 57% passing those costs to customers. In some cases, this led to reduced sales and profitability. Nonetheless, many buyers saw opportunity, especially when businesses demonstrated pricing power and the ability to navigate higher supply costs.
Buyer demand remained strong, with median cash flow rising 6% to $160,000 and revenues increasing 3% to $700,000. Recession-resistant and high-margin businesses attracted particular interest. Manufacturing emerged as a standout sector, fueled by reshoring trends and higher domestic demand. Median sale prices for manufacturing businesses surged 54% to over $1 million, supported by notable increases in cash flow and revenue.
Service industries also experienced a modest 2% increase in closed deals, though median sale prices and revenue dipped 5%. Essential service providers, such as healthcare and auto repair businesses, continued to perform well. In contrast, retail and restaurant sectors faced declines, with restaurant transactions falling 4% and retail dropping 7%, reflecting reduced consumer spending.
Seller financing became an increasingly important tool for dealmaking amid uncertainty. Although 62% of brokers view seller financing as critical, only 19% of sellers currently offer it.
While economic uncertainty may challenge the market, a growing number of retiring business owners and adaptable buyers will help sustain activity through 2025. Preparation, flexibility, and a keen understanding of market shifts will be crucial for small business buyers and sellers.
