analytics

State of the Business Sales Market 1st to 15th February 2013

In general, enquiries are still very strong and as we’re part way through February, we are looking at matching, if not improving on the number of enquiries received for the month of January 2013. It has been very pleasing seeing a high amount of offers being made on businesses this month, a positive sign indeed! In some cases we have seen two parties competing for the same business which is very rare due to the ‘buyers market’ nature of the industry. The growing confidence in the economy and business, I believe, is a big contributor to this trend. As time heals wounds, consumers and businesses are moving on from the hurt brought about from the GFC. In particular lenders are starting to provide more business lending products and competing for business lending again. This lending competition is allowing more buyers access to finance for a business purchase that they previously would not have had. Should this increase in commercial lending and business confidence continue to grow, I foresee that not only business sales will increase but also the multiple or capitalisation in which businesses sell will also increase.

Word of warning….history shows us that a federal election does put the brakes on business sales, it’s a trend that we have witnessed a number of times. I’m not 100% sure why this occurs however my opinion is that it circulates around the uncertainty of what will happen moving forward. I am hoping that given the long drawn out election campaign, consumers and prospective buyers will be more likely to ‘get on with business’ than perhaps a shorter federal election campaign.