The U.S. small business market maintained steady momentum in the first quarter of 2025, according to BizBuySell’s latest Insight Report, with 2,368 businesses sold and a total enterprise value exceeding $2 billion—a 9% increase over Q1 2024. Despite looming uncertainty surrounding new tariffs, deal volume grew 2% quarter-over-quarter, as buyers pursued high-performing businesses and prices climbed 4% to a median sale price of $349,000.
Following a dip at the end of 2024, transactions rebounded in January, climbing 4% amid optimism over anticipated tax cuts, lower interest rates, and deregulation. However, policy uncertainty under the new administration soon tempered that momentum. Transactions slowed by 5% in February and 2% in March, while median time on market increased 15% year-over-year to 198 days.
“Q1 of 2025 definitely picked up speed compared to Q4 of last year… Overall, Q1 felt more energized and productive, and it’s looking like a great start to a big year,” said Charles Patawaran of Gatsby Advisors Brokerage.
Tariff announcements from President Trump triggered concern among buyers and sellers, particularly in import-reliant industries.
“Tariff announcements have added a layer of uncertainty for both buyers and sellers,” said Kinzie Jones of Sunbelt Business Advisors.
Despite delays, buyer demand remained strong. Median cash flow rose 6% to $160,000 and revenue increased 3% to $700,000. Buyers gravitated toward recession-resistant and high-margin businesses.
“If a seller has a stable or growing business… that business will be a rocket ship on the market,” said Max Friar of Calder Capital.
Tariffs were viewed as both risk and opportunity.
“Buyers may find good opportunities when a business has pricing power and can easily pass on the impact of tariffs,” said Vipin Singh of Murphy Business Sales.
Among surveyed business owners, 37% reported increased costs due to tariffs. Of those, 57% passed costs on to customers, and 46% saw reduced sales. Twenty-six percent reported lower profitability, while 34% said it was too early to assess full impact.
“The uncertainty about tariffs and policy is far worse than the actual impact of them,” said Ryan Hemmert of Washington Business Brokers.
Manufacturing saw notable growth amid reshoring trends. Median sale prices in the sector surged 54% to over $1 million, with cash flow and revenue up over 50% year-over-year. New tariffs on steel and aluminum contributed to the shift.
“High demand for domestic manufacturing capacity… led to significantly more deals,” said Raymond P. Dowd of PNW Business Brokers.
The service sector also saw a modest 2% gain in closed deals but reported 5% declines in both sale price and revenue. Essential services like healthcare and auto repair remained in demand.
“[Tariffs] have created nervousness and uncertainty. Buyers are looking for service businesses not as likely to be impacted,” said Art Warsoff of Transworld Business Advisors.
Retail and restaurant sectors continued to struggle under consumer cutbacks. Restaurant transactions dropped 4% while retail fell 7%, with both sectors reporting lower financials. However, some buyers saw this as opportunity.
“I think in this year there will be great opportunities… that’s managerially broken that I can fix,” said James Williams, a buyer in South Carolina.
Seller financing emerged as a critical tool for dealmaking. While 62% of brokers see it as very important, only 19% of sellers intend to offer it.
“Seller financing is uncertainty’s friend, and we live in uncertain times,” said Max Friar.
Looking ahead, BizBuySell reports that economic uncertainty and recession concerns are shaping buyer and seller strategies in 2025. However, a surge of retiring business owners and adaptable buyers are expected to keep the market active.
“Now is an excellent time to sell,” said Friar. “Values are at their peak, take advantage of that,” added Katrina Loftin of M&A Business Advisors.
As the year unfolds, the Insight Report suggests preparation, adaptability, and awareness of industry dynamics will be essential for both buyers and sellers navigating a complex market environment.
Image: BizBuySell
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Joshua Sophy