After a turbulent 18 months for business owners, business owner transition company Platform 1 have found owners facing succession are starting now to think about moving forward. We know now that Covid will have some impact on lives and businesses for some time to come, so will there be an acceleration of business owners exiting?
A recent June Platform 1 business owner survey found there was a decrease in business owners thinking of delaying their exit compared to the same survey conducted after the first lockdown in 2020. This was from 25% down to 17%. “This is consistent with the noticeable increased level of activity we are experiencing from business owners facing this challenge” said Platform 1 Director Mike Warmington.
To some extent lockdown has given business owners more time to think about their business and work on it. One respondent from the anonymous survey said, “Given me a lot more time to think about a correct succession plan that suits my style of business”.
Less business owners now believe it would be more difficult to find a buyer with a reduction from 41% in 2020 to 23% in 2021 shown in the surveys.
Lockdowns over the last 18 months have also set back the plans of incoming entrepreneurs looking for a business. Platform 1 are experiencing stronger demand from people looking to gradually transition into a business. “This has resulted in people with a strong skillset and capital missing out through in a competitive process for limited opportunities. Many of these people have been resident in New Zealand for some time and not recent returnees “said Platform 1 Director Mike Warmington.
The last 18 months have caused a backlog of business owners not exiting their quality established businesses as planned. Some felt in 2020 that they should build back up their businesses or that the time was not right for incoming buyers. Few would have expected that the pandemic would still cause lockdowns late in 2021 and are worn down from it. “Platform 1 expects an acceleration of business owners looking to exit over the next 12 months which could put pressure on the available pool of people. The last quarter of 2021 will be a great time for owners that have been delaying their exit to start the process and access the available people.” said Platform 1 Director Mike Warmington.
About Platform 1
Platform 1 are the market leaders in Business Owner Transition and works with private business owners requiring succession. They specialise in finding people with capability and capital who gradually transition into a business, buying the owner out over time. This can be a partial or full buyout.They work with businesses within the $2M to $20M turnover region across New Zealand.
Media contact for more information:
Mike Warmington – Director, Platform 1 NZ Ltd
(T) +64 211874873
(E) mikewarmington@platform1.co.nz
(W) www.platform1.co.nz
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