Latest / Best of Business / Chris Small: ABC Business Sales managing director on demand outpacing supply in the small business sphere

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Chris Small: ABC Business Sales managing director on demand outpacing supply in the small business sphere · Best of Business

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  Speaker 1: You're listening to a podcast from news Talk zed B.
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  Speaker 1: iHeartRadio godgeather due to see it.
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  Speaker 2: Apparently demand is outstripping supply when it comes to the
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  Speaker 2: sale of small businesses. There is a wrinkle though, for
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  Speaker 2: anyone's selling prices are going down. This is from data
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  Speaker 2: released by ABC Business Sales and the managing director, Chris
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  Speaker 2: Smaller's with us.
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  Speaker 3: At Chris, hey here, welcome back. How are you doing?
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  Speaker 1: Oh?
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  Speaker 2: Thank you. I'm very happy to be back. Although I'm
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  Speaker 2: going to be honest with you, while the bosses are
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  Speaker 2: not listenings, I'm assuming they're not listening for it this
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  Speaker 2: very minute. Doing it one day is something Doing it
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  Speaker 2: every single day from here on and is kind of confronting.
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  Speaker 2: Do you know what I mean?
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  Speaker 3: I'm sure you'd be Okay.
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  Speaker 2: I think so too. I've done it before. Okay, Now, Chris,
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  Speaker 2: why have we got the spike in demand?
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  Speaker 3: Look, there's a couple of buying groups that have really
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  Speaker 3: come to the fore. You know, we've had over twenty
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  Speaker 3: five thousand confidentiality agreements signed this financial year versus nineteen
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  Speaker 3: thousand the year before. And look, we've rea seen a
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  Speaker 3: lot of there's still a lot of new migrants coming
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  Speaker 3: in from countries such as India, China and the Philippines,
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  Speaker 3: and they're more inclined to want to purchase a small
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  Speaker 3: business than actually work for a big corporate. We've also
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  Speaker 3: still got a pretty steady flow of people being made
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  Speaker 3: redundant out of the big corporates, who then have to
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  Speaker 3: look to replicate their income. And they're probably really the
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  Speaker 3: two key groups that have sort of jump jumped on
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  Speaker 3: this sort of business ownership to look to find some income.
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  Speaker 2: And why the price is coming down. Is this a
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  Speaker 2: case of prices actually falling or is it simply that
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  Speaker 2: the average is being skewed by lower prices.
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  Speaker 3: Yeah, it's definitely definitely the latter there, Heather. Again, when
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  Speaker 3: you think about those those Asian immigrants and companies, you
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  Speaker 3: and they're generally their budgets below five hundred thousand dollars,
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  Speaker 3: So we've had a royal uptick and really quite small
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  Speaker 3: businesses being sold for two three, four hundred thousand dollars
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  Speaker 3: in really high volumes, and that's it skewed the average.
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  Speaker 3: Another meaningful statistic we used to measure, you know, how
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  Speaker 3: business prices are going as the multiple, So business is
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  Speaker 3: usually profit times of multiple. Now that multiple has actually
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  Speaker 3: gone up seven percent, so that's almost a better way
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  Speaker 3: of realizing our prices of business is going up. And
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  Speaker 3: the answer to that is, well, the multiples going up
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  Speaker 3: seven it's gone up seven percent, and that's probably a
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  Speaker 3: better test. But yes, you are technically correct. The average
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  Speaker 3: has gone down this because we've got a really high
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  Speaker 3: volume of low price business has been sold at the moment.
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  Speaker 2: How do you think the business in the global economy
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  Speaker 2: is going to just the uncertainty around what Trump is
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  Speaker 2: doing is going to affect sales?
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  Speaker 3: Look really good question. I think a lot of these
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  Speaker 3: businesses are quite domestically. Obviously, anything with an export element
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  Speaker 3: to it that might be goodness. Twenty percent of the
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  Speaker 3: businesses we sell, but eighty percent of the business we
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  Speaker 3: sell are just domestic focused, and they're more interested in inflation,
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  Speaker 3: how much money people are spending domestically. So I would
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  Speaker 3: I would suggest that really it's not It's going to
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  Speaker 3: have a little bit of an effect, but it's not
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  Speaker 3: going to be material or meaningful.
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  Speaker 2: Yes, good stuff, and please to hear that, Chris, thank you
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  Speaker 2: so much, appreciate it. Chris Small ABC Business Sales Managing Director.
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