A new report from accounting firm KPMG, called the Mood of the Market, has underlined a very interesting symptom of this economic recovery – the sale plans of entrepreneurs that were shelved during the GFC are now being dusted off.
According to KMPG’s survey, 58% of business owners said they would consider a change of ownership in the next 10 years, up from just 11% in April. Of these, 42% are considering selling up in the next three years.
We’ve known for awhile that there is a wave of business sales coming, although the downturn clearly forced many entrepreneurs to alter their plans and get their business through a difficult patch.
But as the economy heads towards top gear again, business owners are once again looking at the exit door and wondering: Is it time?
This is going to be a major trend of the next decade, and it creates a big potential problem and a huge potential opportunity.
On the downside, the sellers are clearly going to have to be very reasonable about the price they put on their business. With so many firms likely to be on sale, buyers are going to have lots of choice and a fair amount of leverage. This will drive prices down, and make the negotiating process difficult for sellers who go in hoping for a big price.
However, the opportunity for entrepreneurs looking to expand and build scale – something that is always difficult in Australia – is huge.
Quite simply, if there is a business that you think would be a good fit with your company and add real value, then you are crazy if you don’t call up the owner and take them out for a coffee.
They might well be keen for a chat, and willing to sell for a reasonable price.
And depending on your circumstances, right now might be the perfect time to move. Remember, the good companies will be snapped up first.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
