Tuesday, June 25, 2024

Aussies increasingly looking to buy a business

A flurry of activity in business transactions has been forecast, as a number of factors ignite strong interest in the small to medium business sector.

Business sales marketplace AnyBusiness.com.au says search traffic has doubled and enquiries surged as more Australians look to buy a business.

“Confidence is returning quite strongly, especially for small businesses after the challenges of the last 18 months,” says AnyBusiness Director of Operations Mary Tamvakologos.

“But there are many more prospective buyers than there are sellers at present.”

Favoured businesses

Despite lockdowns and patronage caps, cafes and coffee shops remain the most sought-after type of business in Australia, ahead of takeaway food shops and cleaning businesses.

“Cafes were always our biggest source of enquiry and that hasn’t changed with Covid,” Ms Tamvakologos says.

“In part that’s because there are more of them, but they are also one of the easiest businesses to operate in terms of skillsets and equipment required. They aren’t like specialised manufacturing or professional services where the barriers to entry are much higher.”

A silver lining of the pandemic has been a dramatic increase in the demand liquor businesses, with owners well-placed to extract value from their businesses.

“There’s been a significant uptick in demand for bottle shops etc, given they were deemed an essential service during lockdowns. Their profitability has also increased as more people consumed beer and wine at home instead of at hospitality venues. But new listings of these types of businesses haven’t kept pace – if anything, they’ve become more tightly held. So, there’s upward pressure on the value of those businesses given that supply/demand imbalance,” Ms Tamvakologos says.

Other business types popular with prospective buyers are restaurants, service stations, supermarkets, childcare centres, newsagencies, and motels.

Variation between markets

NSW and Victoria dominate the number of business transactions and enquiries, but Ms Tamvakologos says we are yet to see the full post-lockdown bounce-back in these markets.

Meanwhile despite remaining largely Covid-free, Queensland has suffered the greatest falls in buyer appetite.

“We have seen a noticeable decrease in enquiries about businesses based in Queensland, and we put it down to the fact the borders were closed, so people couldn’t get into the state,” she says.

“Lots of people relocate from the southern states to Queensland, and that has virtually dried up.

For WA, it has been a tough climate for the past 2-3 years for business sales, but AnyBusiness is seeing things pick up in terms of confidence within the state.

Meanwhile in South Australia, the team gets lots of feedback from business brokers that businesses are selling before they are even marketed, says Ms Tamvakologos, “so there’s not a lot of businesses for sale in SA compared to the other states”.

Cashing in on the “Great Resignation”

Looking ahead, rising numbers of prospective buyers entering the market, interest rates remaining at record lows and a return to more normal trading conditions are all positive signs for the business market, says Ms Tamvakologos.

“I definitely think the so-called “Great Resignation” in 2022 will also see more people looking at business opportunities and self-employment,” she adds.

“Everyone has a dream and after the shift in priorities and working conditions of the past 18 months, more people than ever are looking to fulfil that dream!”

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