1
00:00:00,120 --> 00:00:02,000
Speaker 1: I'd Heather do to see it. Well.

2
00:00:02,000 --> 00:00:04,800
Speaker 2: Apparently demand is outstripping supply when it comes to the

3
00:00:04,840 --> 00:00:07,240
Speaker 2: sale of small businesses. There is a wrinkle though, for

4
00:00:07,320 --> 00:00:10,200
Speaker 2: anyone's selling prices are going down. This is from data

5
00:00:10,240 --> 00:00:13,039
Speaker 2: released by ABC Business Sales and the managing director, Chris

6
00:00:13,080 --> 00:00:13,760
Speaker 2: Smaller's with us.

7
00:00:13,680 --> 00:00:16,439
Speaker 1: At Chris, Hey here, welcome back. How are you doing?

8
00:00:16,440 --> 00:00:18,800
Speaker 2: Oh, thank you. I'm very happy to be back. Although

9
00:00:19,079 --> 00:00:20,720
Speaker 2: I'm going to be honest with you, while the bosses

10
00:00:20,760 --> 00:00:22,520
Speaker 2: are not listening, so I'm assuming they're not listening for

11
00:00:22,560 --> 00:00:25,320
Speaker 2: it this very minute. Doing it one day is something

12
00:00:25,360 --> 00:00:26,960
Speaker 2: doing it every single day from here on and is

13
00:00:27,040 --> 00:00:28,360
Speaker 2: kind of confronting. Do you know what I mean?

14
00:00:29,160 --> 00:00:30,520
Speaker 1: I'm sure you'd be Okay.

15
00:00:30,480 --> 00:00:33,400
Speaker 2: I think so too. I've done it before. Okay, Now, Chris,

16
00:00:33,479 --> 00:00:35,120
Speaker 2: why have we got the spike in demand?

17
00:00:36,479 --> 00:00:38,960
Speaker 1: Look, there's a couple of buying groups that have really

18
00:00:39,000 --> 00:00:41,200
Speaker 1: come to the fore. You know, we've had over twenty

19
00:00:41,280 --> 00:00:45,600
Speaker 1: five thousand confidentiality agreement signed this financial year versus nineteen

20
00:00:45,640 --> 00:00:47,920
Speaker 1: thousand the year before. And look, we've really seen a

21
00:00:47,920 --> 00:00:50,800
Speaker 1: lot of there's still a lot of new migrants coming

22
00:00:50,840 --> 00:00:53,120
Speaker 1: in from countries such as India, China and the Philippines

23
00:00:53,120 --> 00:00:55,800
Speaker 1: and being more inclined to want to purchase a small

24
00:00:55,800 --> 00:00:58,800
Speaker 1: business than actually work for a big corporate. We've also

25
00:00:59,080 --> 00:01:01,800
Speaker 1: still got a pre steady flow of people being made

26
00:01:01,840 --> 00:01:04,120
Speaker 1: redundant out of the big corporates who then have to

27
00:01:04,120 --> 00:01:07,120
Speaker 1: look to replicate their income. And they're probably really the

28
00:01:07,160 --> 00:01:09,760
Speaker 1: two key groups that have sort of jumped on this

29
00:01:09,880 --> 00:01:13,480
Speaker 1: sort of business ownership to look to find some income.

30
00:01:13,800 --> 00:01:15,520
Speaker 2: And why the price is coming down. Is this a

31
00:01:15,560 --> 00:01:18,120
Speaker 2: case of prices actually falling or is it simply that

32
00:01:18,160 --> 00:01:20,440
Speaker 2: the average is being skewed by lower prices.

33
00:01:20,880 --> 00:01:25,240
Speaker 1: Yeah, it's definitely the latter there, Heather. Again, when you

34
00:01:25,240 --> 00:01:27,560
Speaker 1: think about those those Asian immigrants and companies, you and

35
00:01:27,600 --> 00:01:30,399
Speaker 1: they're generally their budgets below five hundred thousand dollars, So

36
00:01:30,400 --> 00:01:34,480
Speaker 1: we've had a real uptick and really quite small businesses

37
00:01:34,520 --> 00:01:37,440
Speaker 1: being sold for two three, four hundred thousand dollars and

38
00:01:37,560 --> 00:01:40,520
Speaker 1: really high volumes, and that's swed that skewed the average.

39
00:01:40,520 --> 00:01:43,800
Speaker 1: Another meaningful statistic we used to measure, you know, how

40
00:01:43,880 --> 00:01:46,440
Speaker 1: business prices are going as the multiple, so business is

41
00:01:46,520 --> 00:01:49,600
Speaker 1: usually profit times of multiple. Now that multiple has actually

42
00:01:49,640 --> 00:01:52,440
Speaker 1: gone up seven percent, so that's almost a better way

43
00:01:52,440 --> 00:01:55,120
Speaker 1: of realizing our prices of business is going up. And

44
00:01:55,160 --> 00:01:56,800
Speaker 1: the answer to that is, well, the multiples going up

45
00:01:56,800 --> 00:01:59,720
Speaker 1: seven it's gone up seven percent, and that's probably a

46
00:01:59,720 --> 00:02:02,400
Speaker 1: better tests. But yes, you are technically correct. The average

47
00:02:02,440 --> 00:02:04,040
Speaker 1: has gone down this because we've got a really high

48
00:02:04,080 --> 00:02:07,040
Speaker 1: volume of low price business has been sold at the moment.

49
00:02:07,480 --> 00:02:10,240
Speaker 2: How do you think the business in the global economy

50
00:02:10,320 --> 00:02:12,920
Speaker 2: is going to just the uncertainty around what Trump is

51
00:02:12,919 --> 00:02:14,280
Speaker 2: doing is going to affect sales?

52
00:02:15,240 --> 00:02:17,359
Speaker 1: Look really good question. I think a lot of these

53
00:02:17,400 --> 00:02:20,800
Speaker 1: businesses are quite domestically. Obviously, anything with an export element

54
00:02:20,840 --> 00:02:24,040
Speaker 1: to it that might be goodness. Twenty percent of the

55
00:02:24,080 --> 00:02:25,799
Speaker 1: businesses we sell, but eighty percent of the business we

56
00:02:25,840 --> 00:02:29,760
Speaker 1: sell are just domestic focused and they're more interested in inflation,

57
00:02:30,280 --> 00:02:33,280
Speaker 1: how much money people are spending domestically. So I would

58
00:02:33,320 --> 00:02:37,160
Speaker 1: suggest that really it's it's going to have a little

59
00:02:37,160 --> 00:02:38,360
Speaker 1: bit of an effect, but it's not going to be

60
00:02:38,400 --> 00:02:39,359
Speaker 1: material or meaningful.

61
00:02:39,760 --> 00:02:41,440
Speaker 2: Yes, good stuff and please to hear that, Chris, Thank

62
00:02:41,440 --> 00:02:44,800
Speaker 2: you so much appreciated Chris Small, ABC, business sales Managing Director.

63
00:02:45,400 --> 00:02:48,560
Speaker 2: For more from hither Duplessy Allen Drive listen live to

64
00:02:48,680 --> 00:02:51,720
Speaker 2: news talks. It'd be from four pm weekdays, or follow

65
00:02:51,760 --> 00:02:53,520
Speaker 2: the podcast on iHeartRadio