Australia in the path of a ‘business sale tsunami’
An Australian business author has warned that Australia is about to be hit with a tsunami of business sales, as many owners are nearing retirement age.
Subsequently, the marketplace is about to become unprecedentedly crowded and competitive, which Riley argues is only complicated by the current economic climate.
Riley contends that this could have monumental consequences and implications for business owners, specifically those who are reliant upon the sale of their businesses to fund their retirement.
“The marketplace is clearly going to see a lot of businesses changing hands, many for sale on the open market, while the ageing population indicates that there will be fewer available buyers.
“Since the Global Financial Crisis, financial institutions are carefully scrutinising small business access to funding therefore limiting the pool of potential buyers for businesses.”
Ms. Riley said that a business needed to be fully prepared in order to achieve the best price, which means implementing strategies now to make the investment more appealing to a potential buyer in the future.
“It’s important to think like a buyer who will be looking for things like growth opportunity, well-honed organisation and management systems, a quality management team a diversified customers base, acceptable age and condition of plant and equipment and protected intellectual property.”
This projected onslaught has implications not only for business owners, but for the broader economy and labour force as well.
Small businesses currently employ roughly forty per cent of all Australian workers, and the inability of a business to sell would directly impact upon the workforce.
Those unable to sell could also fall victim to overseas investors, which might have unforeseen consequences for both consumers and for overall product quality.