Entering the second half of 2025, the business environment is complicated but offers unique opportunities for both buyers and sellers. While the year started on a cautiously optimistic note, the last six months confirm some assumptions: inflation has subsided more than anticipated, consumer demand remains stable, and the capital markets, while not as heated as the past few years, continue to support well-thought-out deals.
For Business Owners Looking to Exit
Valuations remain relatively robust for healthy, well-positioned businesses, particularly in healthcare, B2B services, logistics, and some niches of technology. However, buyers today are considerably more selective. Due diligence is deeper, and growth expectations are being more closely scrutinized. Those who invested resources into clean financials, recurring revenue, and stable leadership are experiencing appreciation for the value in their companies, yielding stronger offers and faster deal cycles.
Now is also a good time to rethink timelines. With an interest rate cut likely in the coming months, buyers may gain access to more financing options and quickly revive stalled conversations. However, as more owners choose to wait until 2026 or later, buyers will likely face tougher competition for fewer available opportunities.
For Buyers Observing the Market
This first half of 2025 demonstrated that strategic buying remains one of the quickest routes to growth, especially as organic growth has become more expensive. Private equity and individual investors remain active, structuring deals more creatively with earn-outs, seller financing, and performance-based payouts.
Buyers look at the macro signs as well. They notice a slight uptick in small business confidence, as well as healthy job numbers. Now, many individuals feel comfortable making a move, particularly with companies that have shown resilience to increased prices and changed customer needs.
Summary for Both Sides
Timing Still Matters: Mid-year market conditions seem optimistic, but require patience and preparation. Rushing an exit or acquisition without adequate research will likely lead to underperformance.
Cash Flow is King: Whether selling or buying, focus throughout 2025 returns to the fundamentals – recurring revenue, low churn, and clean books.
Strategy over Sentiment: This is not the environment for emotional decision making. Buyers want clarity and risk mitigation; sellers need transparency and strong positioning.
Looking Forward
The second half of 2025 may bring more favorable lending conditions, and the economy is still showing signs of cautious but economic growth. So, now is the time to assess position, readjust goals, and take action before the end-of-year rush.
Jason Sanders | Managing Partner
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