Fuseworks Media

‘Corporate refugees’ and former govt consultants fuel record demand for owning a business

Demand and enquiries from potential business owners is at record levels – nearly 50% higher than the same time last year.

It’s a continuing theme from the record breaking total of 17,000 Confidentiality Agreements (interested buyer NDA’s) signed up last year by New Zealand’s leading business brokerage – ABC Business Sales.

Managing Director, Chris Small, says an intriguing trend they’ve noticed in the cohort making enquiries includes ‘corporate refugees’ (former corporate employees looking for a lifestyle change) and former (recently unemployed) government consultants.

“They’re part of what we call the ‘buy yourself a job’ market.

“It’s a very real and growing market which includes those such as the ex corporates and consultants who for various reasons are now unemployed and are thinking seriously about taking control of their future work destiny by buying their own business,” says Small.

Small sights examples of a former high-level executive who recently bought a significant business in Southland – also representative of the regional drift of people moving out of Auckland for both cost and lifestyle reasons – as well as ex-goverment consultants doing due diligence on barber shops in Christchurch and landscaping businesses in Hawkes Bay.

“We certainly anticipate even more enquiries from those with previous consulting experience as that sector is set to shrink dramatically under this new coalition government’s policies.”

Although the average price for buying a small business dropped by 5% in 2023 (off its December 2022 peak) there is optimism around a price rebound following the 2% lift already achieved at the very end of last year.

ABC Business Sales’ latest Market Intelligence Report forecasts a positive outlook for business sales, anticipating a 5% – 7% annual increase in prices. Key drivers being:

– ongoing record immigration fueling demand

– a surge in M&A activity expected in the first half of 2024 following last years’ election

– increased investor confidence for the future of NZ’s economy especially due to forecasted interest

rate declines