The ‘Demographic Cliff’
Baby boomers own as many as 75% of private businesses. Right now, there is a surge of baby boomers who want to retire and they are facing a challenging time selling. There is simply not enough of the younger generation to take over existing concerns. This means there is a huge supply, a lack of demand and a lot of motivated sellers.
THE ECONOMIC DOWNTURN
The economic downturn has had a crippling effect on small and medium enterprises.Last year, there was a 15% jump in companies entering external administration according to the Australian Securities and Investments Commission (ASIC) and debt collectors have reported a spike in business-related collections. Many of these businesses can be saved and be made profitable again.
RECENT ‘SAFE HARBOUR’ LAWS
Up until recently, there was a lot of risks associated with taking over a struggling business. Our legal system ‘punished’ people for trying to save a business. But in September 2018, that all changed with ‘Safe Harbour’ Laws under the Corporations Act. The government introduced new legislation to encourage business takeovers and turnarounds.