New Technology Impacting Value of C-store Businesses
SAN FRANCISCO — Although small-business owners feel there is great value in what they provide, new technology platforms such as Uber, Airbnb and even Amazon are affecting small-business values, according to a study released by BizBuySell.com.
The study surveyed more than 1,400 small-business owners and potential buyers to see how each would value a business in today's increasingly competitive market, specifically in regards to emerging competition from companies leveraging disruptive technology or direct-to-consumer business models.
"People go in to brick-and-mortar stores, research the product by talking with salespeople, then go online and order it cheaper from someone else," said one small-business owner.
Although the research results show challenges for retailers, there is one positive note. Convenience stores and liquor stores — grouped together in the BizBuySell.com study — and gas station operators are nowhere near as concerned about disruptive technologies as the rest of their retail counterparts.
Only 38 percent of convenience/liquor stores and 31 percent of gas station operators said they believe disruptive technologies represent a threat to their small businesses, compared to 57 percent of all retailers.
Conversely, convenience/liquor stores are ahead of the pack regarding mobile phone technologies and their impact on business values. Forty-four percent of those surveyed in these two retail segments believe mobile phones and their ability to give customers on-the-go information about surrounding businesses raises the value of small businesses, compared to 42 percent of all retailers.
Forty-one percent of convenience/liquor stores believe mobile smartphone technologies do not affect small business values, while 15 percent said they believe these technologies negatively affect property values.
As for gas stations, 23 percent believe mobile technologies increase property values, 69 percent said they have no effect, and 8 percent said they negatively affect property values.
BizBuySell also asked retail owners if online reviews affect small-business property values. Exactly one out of every two convenience/liquor store retailers said these reviews affect property values, compared to 82 percent of all retailers.
According to BizBuySell, retailers should be more proactive in terms of online reviews. “A much higher overall percentage of buyers believe online reviews affect the value of a business, meaning it's something they will consider when making an offer,” the report revealed. “Buyers are also more trusting of online reviews. Seventy-two percent feel online reviews are a good indication of products/services compared to 58 percent of the owners.”
Small-business buyers are often coming from a younger generation than sellers and may be more perceptive to how technology will affect the future of the business, added Bob House, group general manager of BizBuySell.com and BizQuest.com. "Owners should be aware of how new innovations, business models and online reviews are affecting their value and be ready to address the issue during negotiations."
San Francisco-based BizBuySell is the Internet's largest business-for-sale marketplace.