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Business Sale Trends in Sydney

Sydney is a vibrant city of more than 5 million people that features good food, beautiful beaches and a great start-up culture. For business owners wanting to sell in the city, this is great news because so many people want to live there. However, selling your business comes down to more than just being in a great location; trends such as an aging population and a wish for work/life balance can affect how easily you make that sale.

Aging Population

Around 3.8 million Australians, or 15 percent of the population, are aged 65 and over, and many of them own businesses. These business owners are ready to retire, and they want to sell their business to give them a retirement nest egg. Baby boomers began reaching retirement age in 2010, and between 2012 and 2014, the number of small businesses for sale jumped from 20,000 to over 41,000.

More businesses on the market can lead to more competition, which can drive down offer prices. This doesn’t mean that enterprises aren’t selling. Some in the industry believe that potential buyers still outnumber businesses for sale. New migrants often wish to purchase a business, and many pool funds with friends or family to find the capital. Businesses may also want to think about internal buyouts or vendor financing to find a buyer.

Online vs. Brick and Mortar

The debate between an online business versus a store has been going on for quite some time. As far as offer numbers are concerned, online businesses are often worth more. They have lower overhead and can reach a worldwide audience, but risk is still involved. Businesses that rely heavily on social media or search engines can find they lose their audience, and market, when the algorithms change.

Brick-and-mortar businesses have more overhead but are often seen as being reliable. Businesses that offer a product or service that customers need regularly are sure to find buyers quickly. A good example is a tyre business because tyres wear out and need replacement.

Other brick-and-mortar businesses are quickly becoming obsolete. Video rental businesses were big moneymakers in the 90s but have disappeared in the world of video streaming. Today, people trying to sell bookstores, newsagents and boutique gift stores are having similar problems due to both the online market and department stores taking over. Owners of these types of businesses should show buyers that their earnings are repeatable in the long term.

Work/Life Balance

Many business owners don’t want to be married to their business. In the past, it was understood that owning a business was a seven-day a week commitment, but young buyers want a business that allows them time to spend with their family or do what they love.

Most experts will tell you to make yourself redundant when preparing to sell. By that, they mean that you need to ensure the business can run without you. This helps you capture potential buyers who don’t want to buy themselves a 24/7 job. You can show the new owners how they can run the business without constantly being on call and still make a profit.

Trending Industries

Many different types of businesses can be successful in Sydney, but there are trends in the types of businesses that are seeing growth. The aging population has not just caused an uptick in businesses on the market, it’s also responsible for the growth of the aged care industry. In 2018, people are healthier for longer, but they may still want to look into a retirement village or seek some help taking care of chores around the house. The older generation could double by 2057, so it’s unlikely the industry will shrink.

Other industries that are prominent in Sydney are tourism, technology and creative, financial and professional services. The city sees these as being significant contributors to the economy, and it's actively supporting the growth of the night-time economy and green economy, which it identifies as emerging sectors.

 

If you're considering buying into a business in Sydney, or selling your own, LINK Sydney’s professional business brokers can help you settle in and find the perfect business to suit your professional experience. Contact LINK Sydney today.