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Baby boomers to struggle as buyers market looms

With 270,000 businesses expected to saturate the market in the next five years, many business owners will be forced to accept a sub-standard price or walk away with nothing.

According to the Exit Smart Survey conducted by national chartered accounting and advisory form William Buck, almost 80 per cent of business owners are over 50 years of age with 65 per cent expected to sell in the next five years.

Tony Hood, Corporate Advisory Director at William Buck, said “there simply won’t be the buyer demand out there to absorb the predicted volume of supply, leaving many business owners with no choice but to explore mergers, business consolidations or as a last resort simply close the doors and walk away.

“As for young entrepreneurs, they face their own challenges. In the current financing environment, banks and other lenders require substantial collateral to secure a loan, which is a luxury many potential young buyers don’t have,” said Mr Hood.

Mr Hood advised that business owners should start thinking about their exit from the business as early as possible because it can take up to five years to implement strategies required to optimise value.

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Daniel Jacobs

Daniel Jacobs

Daniel Jacobs was editor of Dynamic Business.

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