Treasurer Jim Chalmers says record business registrations prove the economy is booming. Accountants and tax specialists say the numbers mask restructuring and side hustles, not new commercial activity. We think they’re right.
What the source piece flagged
A recent news.com.au piece on Treasurer Jim Chalmers’ business numbers claim dug into why the new company registration figures keep climbing. Accountants and tax specialists say most of those numbers aren’t real new businesses opening. They’re more about restructuring, changes to family trusts, and new entities set up around existing operations. You don’t need to look far to see the small business story on the ground. Walk down most main streets and vacant shop fronts are obvious. Recently it looks like more are closing than opening. Some of the new registrations are side hustles, set up because cost-of-living pressure is real and people need extra income. The article’s underlying point: ASIC registration numbers don’t reliably track new commercial activity.
What we’re seeing from the broker side
For more than twenty years, the reasons business owners contact us to sell haven’t changed much. The same reasons come up over and over:
- Retirement
- They’ve had enough and want a change
- Health issues
- Divorce or separation
- Business partner breakups
- A business underperforming financially
We have more than 200 enquiries each month from business owners looking to sell, and we help all of them. Over the last couple of years, we’ve seen an uptick in those contacting us to sell because their business is no longer generating the income it once did. That’s probably to be expected when inflation is on the rise. The usual other reasons are still there too.
And the buyer side
We’re also seeing a huge number of buyers come through looking for businesses. When the economy’s under pressure, people worry about their job security and that often drives them to take control of their income by buying a business instead of relying on an employer. A lot of people have access to equity in their property because of the large increases in property values over the last three to five years nationally. So buyers are in a very good position to get finance and afford to buy a business that can make them good money. That’s what gives us confidence about the buyer pool. We generally have more than 1,500 brand new people each month contacting us to buy a business. Demand is really strong.
Are you ready to find out what your business is actually worth to a buyer today? And do you know what the buyer pool looks like for your industry right now?
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