Business

Demand and enquiries for businesses at record levels

13:22 pm on 13 March 2024

Photo: 123rf

Demand and enquiries for businesses are at record levels, driven by increased immigration and former corporate workers and government consultants.

Business brokerage ABC Business Sales said enquiries were nearly 50 percent higher than a year ago, with the company seeing about 500 non-disclosure agreements signed per week.

It followed a strong 2023, where the company saw a record 17,000 confidentiality agreements signed.

Managing director Chris Small said so-called "corporate refugees" and former, recently unemployed government consultants were fuelling demand.

He said "corporate refugees" were ex-corporate workers looking for a lifestyle change.

"They're part of what we call the 'buy yourself a job' market," Small said.

"It's a very real and growing market which includes those such as the ex-corporates and consultants who for various reasons, are now unemployed and are thinking seriously about taking control of their future work destiny by buying their own business."

Small said those workers came from high income jobs and had cash available to invest.

The average price for buying a small business fell 5 percent last year, as buyers exercised caution due to the economic environment.

"At that point ... buyers were a little bit nervous about interest rates and also we had the election in October, there was just a fair bit of uncertainty."

But based on recent trends, ABC forecast a 5 to 7 percent annual increase in prices in 2024.

It said key drivers were ongoing strong immigration, an expected surge in mergers and acquisitions activity following the election, and increased investor confidence as interest rates are exected to fall.