BIZ NEWS SEPTEMBER 2024

Market Report

Bizstats (NZ’s aggregator of SME business sales data in New Zealand) shared their latest report for the 2nd quarter for 2024 (apr-Jun) this informs us that activity is similar to the same period of 2023. They comment that it is pleasing to see that sales volumes have returned to 2021 level after 2 years of reduced activity. Of the data submitted for business sales the average sales price for this period was $586,000. SDE multiples have shown a continued decline since 2021, however historically, multiples pick up in Q3 so time will tell if the declining multiples flatten out.
At CML office, September, like the previous months of this year is tracking really well, with all specialisation sectors buzzing with activity and a record number of enquiries flooding our inbox each morning.
There’s a vibrant energy in the office, thanks to a team that truly supports one another. One thing you may not know, when you list your business with us at CML, you get to benefit from the entire team’s expertise. This collaborative approach has proven incredibly successful for us in our 52 years of selling businesses, and the camaraderie among our team is a testament to that.

Why?... Do People Buy Businesses

We have a strong focus on key specialisations at Clyth MacLeod Business Sales, with business brokers who handle both small and large sales. We recognise that the motivations for buyers vary significantly and such motivations often reflect the sale price achieved.

For the Larger businesses, the reasons are:
While independence and challenge are common desires amongst all business buyers, those interested in high-value businesses also often seek growth through acquisition or diversification with complimentary services. Investor groups may also be looking for high returns in specific industry sectors.

Individual buyers frequently aim to transition from management or technical roles (whether corporate or otherwise) to take control of their own business. Many former managers are earning substantial salaries $250,000 - $300,000 or more, so they typically look for businesses that allow them to earn at least that and possibly $100,000-$200,000 more as an incentive for being prepared to take a leap of faith in owning their own business.
For these buyers, it’s about building wealth rather than simply earning a wage. They are psychologically prepared to take on greater risks and manage larger responsibilities.

For the smaller businesses, the reasons are:
Independence - own your own business and you are the boss, you make the decisions, you control your destiny, and you have opportunities for personal growth.
Employment - still the number one motivation for business ownership, "buying a job" for you and your family, and particularly for immigrants (who enrich our country culturally and financially!)
Security - owning your own business provides a solid safety net especially in time of redundancies.

Profits - yes, a business has to make a profit to survive, but many buyers are not truly entrepreneurial and are happy if they have a business that provides a secure and comfortable living.
Lifestyle - it is great to own a business allied to a hobby or passion, (e.g. a bookshop, sports, music, food, etc) or a lifestyle change such as a country store or a beach store.
Challenge - for some investors the focus is on building the business, growing sales, increasing profits, or tapping the potential. Most businesses we see are improvable.

We believe that the purchase of a business provides the greatest opportunity for an individual or a company to achieve growth, equity build up, independence and personal satisfaction.

We recently enjoyed a delightful team lunch at Pearl Garden in Newmarket to celebrate Glorianne's 29th anniversary at Clyth MacLeod Business Sales. Bringing a wealth of knowledge Glorianne is an inspiring leader for our team. Her hands-on approach and daily presence in the office provide invaluable support to our fantastic crew, fostering an environment where everyone can learn together.

We recently discovered that Pearl Garden has been in operation nearly as long as Clyth MacLeod Business Sales, boasting an impressive 50 year history of serving delicious Yum Cha cuisine. Renowned for its Yum Cha and Cantonese style, Pearl Garden continues to delight diners with dishes that have been cherished for years, all while remaining family-run since its inception. - How neat is that!

CML & Skykiwi Bring to you the Business Sales Forum

Skykiwi offer a unique opportunity for their Chinese audience to attend the first Business Sales Forum which will be held in Auckland.  This event serves as a platform exclusively for business buyers & sellers or anyone with common interest in starting a business in the New Zealand market.

Industry experts, consultants, and savvy entrepreneurs will be conducting in-depth discussions around business ownership.