The start of FY2025 means that now is the perfect time to analyse New Zealand’s business market dynamics. Neil Craigen, Sales Manager at LINK Business Brokers Ellerslie, offers some reassuring insight into the current conditions that aspiring and departing entrepreneurs alike are facing. Neil’s overarching message is one of positivity, informed by prominent buyer enquiry and strong businesses coming to market.
Many longtime business owners are entering retirement or seeking a change in lifestyle, leading to them selling their companies and relocating. Simultaneously, acquiring a business remains a desirable way for Kiwis to escape the 9-5 grind and achieve success on their own terms. “On the buyer front, last financial year we had over 40,000 buyers sign Confidentiality Agreements with LINK, which is significantly up, and April numbers are still trending upwards,” Neil says, “there are some great businesses for sale that are receiving hundreds of enquiries, providing an attractive variety for buyers as well as confidence for vendors who are ready to move on from ownership.”
As of late, the hospitality industry is generating robust interest from aspiring entrepreneurs due to its healthy market position. This derives from increased tourism & immigration to New Zealand and the subsequent strong hospitality workforce, as well as consistent demand for quality dining establishments throughout the country. Hospitality businesses are also sought-after ventures for first-time buyers thanks to simple operations.
The contemporary market is also characterised by easier access to capital for buyers. “Banks have confirmed that they have funds to lend on more favourable terms, plus the Reserve Bank has held off on any more rate rises with a forecast for rate drops by the end of this year,” explains Neil. As a buyer, it is important to work with a business finance specialist to ensure the entire funding process is as smooth as possible.
Neil advises that all business owners should always be readying their business for sale, regardless of whether they intend to sell now or much later down the road. Engaging the help of a business broker when it comes to selling smoothly is a necessity. “A broker can provide a realistic market appraisal and help you determine an exit timeframe, providing you with an informed path to take,” says Neil.
For owners interested in selling soon, there are several important steps to take. “The numbers will always be important, so having up to date financial information is crucial. Looking at ways you can improve your return-on-investment through growth of the top line while maintaining or reducing costs will put your business in an optimal position for when it hits the market.” He also emphasises the importance of reviewing marketing strategies and identifying areas for improvement, as well as locking in customer & supplier arrangements.
On the other hand, business buyers must start by working with a team of professionals to help them understand what capital is available to them and what type of business is suitable. “Recognise your skillset and what role you will realistically play in the business you’re considering purchasing,” Neil says. “Do your due diligence – if there are responsibilities you don’t want to handle, make sure there is somebody who does so that you can focus on what you like and are good at!”
Whether you’re dreaming of buying your first business or preparing to pass on the reins, now is a pivotal moment in New Zealand business. With powerful buyer interest, promising lending conditions, and a supportive market environment, there’s never been a better time to contact LINK Business Brokers.
