Business owners looking to sell face a shrinking demand for their businesses. A combination of oversupply and a credit shortage for potential buyers, accentuated by the subprime fallout, are disrupting exit strategies. According to the latest BizExchange Index, the number of businesses on the market was up 25 per cent on the previous quarter and sale prices were down 5 per cent. BizExchange chairman David Bird said the results from the December quarter indicated “softer” prices. “It is looking a bit softer at the moment … it might be an oversupply rather than a shortage of buyers—and buyers might be waiting and seeing,” he said. BizExchange said the drop in values and jump in listings was bigger at the smaller end of the market. The December quarter results showed a reduction in the number of hospitality businesses for sale. But the report said that “These industries will continue to be over-represented because these industries have traditionally had high churn rates with some businesses changing several times in a decade”. Mr Bird said sometimes people went into cafes and restaurants with “rose-coloured glasses”. “They are harder businesses with long hours, long weeks and they stay for a shorter time,” he said. Mr Bird said often people did not appreciate the hard work associated with hospitality businesses. The Daily Telegraph, February 11.
Feb 17
