Buy a business enquiries surge with dream of being boss.

Search traffic doubles, enquiries surge as more Australians look to buy a business. Drop in businesses listed for sale intensifying competition among buyers. Cafes remain most popular, boom in demand for liquor businesses. Queensland biggest loser from COVID border closures.

Leading business sales marketplace AnyBusiness.com.au is forecasting a flurry of activity in business transactions, as a confluence of factors ignite strong interest in the small to medium business sector.

While all eyes have been on ballooning property prices, business values are also primed for post-COVID growth amid surging demand, border reopenings, eased operating restrictions and fewer listings.

Mary Tamvakologos, Director of Operations, AnyBusiness, says the outlook is positive for the business market, amid a perfect storm of strong demand, short supply and surging consumer and business confidence.

“Confidence is returning quite strongly, especially for small businesses after the challenges of the last 18 months. But there are many more prospective buyers than there are sellers at present.

“On AnyBusiness’s directory of businesses for sale, we have seen listings slump from almost 22,000 pre-COVID to just over 16,000 currently. That’s despite website traffic almost doubling and buyer enquiries remaining stable over the past 18 months. And with lockdowns now ending in the southern states, we’re expecting the number of enquiries to increase.

Mrs Tamvakologos says that despite lockdowns and patronage caps, cafés and coffee shops remain the most sought-after type of business in Australia, ahead of takeaway food shops and cleaning businesses.

“Cafes were always our biggest source of enquiry and that hasn’t changed with COVID. In part that’s because there are more of them, but they are also one of the easiest businesses to operate in terms of skillsets and equipment required. They aren’t like specialised manufacturing or professional services where the barriers to entry are much higher.”

A silver lining of the pandemic has been a dramatic increase in the demand liquor businesses, with owners well-placed to extract value from their businesses.

“There’s been a significant uptick in demand for bottle shops etc., given they were deemed an essential service during lockdowns. Their profitability has also increased as more people consumed beer and wine at home instead of at hospitality venues. But new listings of these types of businesses haven’t kept pace – if anything, they’ve become more tightly held. So, there’s upward pressure on the value of those businesses given that supply/demand imbalance,” Mrs Tamvakologos says.

Other business types popular with prospective buyers are restaurants, service stations, supermarkets, childcare centres, newsagencies, and motels – the latter owing to renewed interest in local travel given border closures.

While many of these sectors also dominate the volume of businesses listed for sale, others that have larger numbers on the market include hair and beauty salons, gyms and sports complexes, construction firms, and retailers.

Naturally there is variation between markets across the country. NSW and Victoria dominate the number of business transactions and enquiries, but Mrs Tamvakologos says we are yet to see the full post-lockdown bounce-back in these markets. Meanwhile despite remaining largely COVID-free, Queensland has suffered the greatest falls in buyer appetite.

“We have seen a noticeable decrease in enquiries about businesses based in Queensland, and we put it down to the fact the borders were closed, so people couldn’t get into the state. Lots of people relocate from the southern states to Queensland, and that has virtually dried up.

“I do see that turning around though, and already coming into this month, we have seen a good increase in enquiries.

“For WA, it has been a tough climate for the past 2-3 years for business sales, but we’re actually seeing things pick up in terms of confidence within the state. Meanwhile in South Australia, our team at AnyBusiness gets lots of feedback from business brokers that businesses are selling before they are even marketed, so there’s not a lot of businesses for sale in SA compared to the other states.”

Sydney-based business broker Zoran Sarabaca, of Xcllusive Business Sales, echoes Mrs Tamvakologos’s observations on buyer enquiries and listing volumes during COVID.

“People were told it wasn’t a good time to sell during lockdown, but it actually was – there were lots of enquiries coming through but fewer businesses being listed for sale. Because of the end of lockdown in NSW, Victoria, and the ACT, more businesses are now being listed for sale.

“We’re seeing strong demand across the board, not just confined to any particular industry. But anything to do with liquor, or essential services more broadly, there has been considerable demand for those businesses. And that has continued post-lockdown. Also, online businesses – anything you can run from home or isn’t tied to one place or region, they remain popular too.”

Mr Sarabaca adds that enquiries aren’t restricted to a particular type of buyer.

“Buyers active in the market right now are a mixture of people wanting to take charge of their own livelihoods and other businesses trying to grow. There’s more private buyers than businesses, simply because there are more people than companies, but both sectors are pretty active at the moment.”

Looking ahead, rising numbers of prospective buyers entering the market, interest rates remaining at record lows and a return to more normal trading conditions are all positive signs for the business market, says Mrs Tamvakologos.

“We’ll also see more listings as more business owners make the decisions to sell, given the strong level of buyer interest as well as high vaccination rates – especially in NSW, Victoria and the ACT – delivering a sense of optimism that lockdowns will be a thing of the past.

“I definitely think the so-called “Great Resignation” in 2022 will also see more people looking at business opportunities and self-employment. Everyone has a dream and after the shift in priorities and working conditions of the past 18 months, more people than ever are looking to fulfil that dream!”

To learn more about how to buy a business see Small Business Answers guide.
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About Angus Jones

Angus started his first small business in 1989 and has since gone on to have a successful career in marketing. He realised although there were many websites for small business none was addressing the question of how to. Angus has a passion to articulate benefits that add value to customers/readers.

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