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Buyers, Sellers of Businesses Spend $1.7B on Telecom Each Year

Changing ownership costs businesses more than $1.7 billion each year in telecom expenses alone.

That’s according to a new survey from BizBuySell.com, which tracks companies’ for-sale listings. BizBuySell.com found that more than 88 percent of SMB buyers, and another 30 percent of sellers, said they either increased telecom spending, added products or services or switched vendors when undergoing an ownership transition. BizBuySell.com said its own data, alongside U.S. government figures, show that about 500,000 businesses changes hands each year.

These numbers show how important the substantial investments business owners make during an ownership transition are to the economy,” said Curtis Kroeker, general manager of BizBuySell.com. Prior to selling, owners usually invest in their business to support a higher asking price while, post-sale, owners spend to drive business performance and get the business running the way they want.”

Of course, for channel partners, such activity represents unique opportunity to add new customers to their rolls. More than half (56 percent) of survey respondents said they added a new telecom provider or change to a new one entirely. Another 17 percent added or switched to new telecom products after buying a business. And, finally, another 15 percent of business buyers upped their use of existing vendors. These buyers further spend about 25 percent more in the first year than owners who launch a business from scratch $95,878, as compared to $76,704.

“This survey reveals a new opportunity that has largely flown under the radar that owners selling and, especially, those buying established small businesses are a huge target market,” said Kroeker. “Its a bit counterintuitive, but it makes sense. In most cases, someone who has recently purchased a business has more capital available, more concrete needs, and is managing a much larger business than his counterpart starting a business from scratch. Thats definitely something … [to] keep in mind when pursuing new sales.”

Similarly, 19 percent of business sellers said they added or changed to a new supplier before they sold; an additional 11 percent moved to a different product, tacked on more services or increased the number of services they use with an existing telecom vendor.


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