Boomer SMEs May Never Be More Valuable Than Now

The predicted wave of New Zealand baby boomers selling their businesses has not materialised—despite market conditions offering a unique window of opportunity— and factors like the GFC, cost of living, COVID, and now artificial intelligence (AI) may be the reason.

Bruce Cattell, CEO of Link Business Brokers, says that while there are small surges of boomer businesses coming up for sale, the expected large-scale sell-off hasn’t occurred.

“Boomers are healthier, living longer, and many can now work remotely—from the beach if they want to,” he says.

“Add the setbacks of the GFCs, COVID, and the current economic climate—which have impacted asset values—and it’s clear why some business owners are waiting for a more favourable time to sell.”

Cattell highlights that New Zealand is experiencing record levels of buyer interest, partly due to declining interest rates.

“Lower interest rates are driving buyer demand, making this an opportune time for business owners to consider their exit strategies,” says Cattell. “Capitalising on these conditions could be advantageous. Waiting too long poses its own risks.”

A crucial aspect of a successful exit strategy is timing. Cattell advises that business owners should not only focus on the current health of their businesses but also consider market dynamics.

“Selling when market conditions are favourable can be just as important as ensuring your business is in top shape,” he says. “The coming 12 months present a window between recent crises and potential future disruptions—be it pandemics, economic downturns, or technological shifts like AI. This period could be ideal for those looking to maximise their returns.”

While the current market is strong, Cattell notes that many business owners are still recovering from past economic challenges.

“They’re working to increase their business value, but there’s no certainty in the market,” he says. “Having a well-planned exit strategy is essential. Timing your sale to align with favourable market conditions can make a significant difference.”

For those considering selling, Cattell offers key advice for business owners thinking about an exit:

1. Understand your business's future potential

Look beyond immediate value and assess where your business could be in the coming years. Weigh emerging risks and opportunities that could affect its future worth.

2. Plan for future market shifts

The market is dynamic. New technologies and potential crises mean business owners need to stay informed about factors that could influence their businesses' value.

3. Set an exit strategy

Develop a comprehensive plan for selling your business, including financing options like vendor funding, as younger buyers may have different capital access.

Cattell’s says AI and other technological advancements are progressing rapidly, and in the next few years, they could transform industries.

“Business owners who act while the market is favourable may find themselves in a better position to secure the best possible outcome,” he says.

ABOUT

Link Group International, founded more than 27 years ago, specialises in connecting business owners with buyers globally. With 23 offices across New Zealand, Australia, and the USA, its extensive network includes over 200 specialist Business Brokers. The company maintains a robust database of over 250,000 active buyers, ensuring it meets diverse client needs effectively and efficiently.

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