Chris Small: ABC Business Sales Managing Director on the demand for small businesses

New data suggests demand for owning a small business is booming. 

ABC Business Sales reveals store ownership sales in the last three months were nearly 40% higher compared to the same period last year. 

It's also received more than 20 thousand enquiries from potential business owners in the last 12 months, ending June. 

Managing Director Chris Small told Mike Hosking an influx of new immigrants is a large proportion of the new business owners. 

He says the majority are coming from the Philippines, India, and China, and it seems they're keen to work for themselves. 

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Episode Transcript

Speaker 1 (00:00):
New insights into the economy job wise and ownership wise.
Ownership and sales of small businesses booming, booming up thirty
seven percent on last year. Basically, we're looking to buy
ourselves a job. I think that's what it is. That
data comes from ABC Business Sales Managing Director Chris Small
is with us. Chris, very good morning to you.

Speaker 2 (00:17):
Okay, Michael, you're doing very well.

Speaker 1 (00:18):
Thank you. How much of this is the immigration story?
People arrive in the country and go I'm going to
buy myself something. Yep.

Speaker 2 (00:24):
No, that plays a really big factor. And that's when
we actually delve down into the data. We found it
is a really high proportion of Filipinos, Chinese and Indians
that we're making up a lot of the new purchases.
And if it's pretty clear that that group of people
certainly prefer to work for themselves, own a business rather
than become an employee of the big corporation.

Speaker 1 (00:45):
So as in immigration slows, would you expect business sales
growth to slow?

Speaker 2 (00:51):
Yep, that certainly could be affected. But I think what
we've seen is that New Zealanders are leaving, well, a
certain portion of the Johns are leaving and now been
replaced by migrants from these countries, and so why that
continues to happen, will still have a decent demand for
businesses with that sort of that proportion of the ethnicity
coming into New Zealand.

Speaker 1 (01:11):
The other side of the economy businesses for sale? Why
are they for sale? Are they stressed or not?

Speaker 2 (01:17):
No, not at all. We would probably probably five percent
of our business sales are stressed because the usual story
we've got a third come from business, but from the
boomers who are either generally too old to old to
continue working, so in retirement, age, marital dispute, shareholder disputes,
you know, all the usual reasons, people leaving New Zealand

(01:38):
or moving location. So generally the reasons these business sales
are occurring once you'll read on.

Speaker 1 (01:43):
The economy, because I mean, just this morning, yet again
the hospow industry are screaming and they're going we cannot
keep the doors open, people's wallets are closed. Therefore, surely
some of those businesses would be put up for sale
as opposed to just close down, wouldn't they? Or is
that not the case?

Speaker 2 (02:00):
Those in the current market mark if the business isn't
making money, they're generally not sellable. So we do talk
to those people and we're really really honest conversations and
say that until you start making money, there's not going
to be an interested purchaser out there, which makes sense.
Someone's going to pay good money for something that's going
to cause them a loss on day one.

Speaker 1 (02:19):
So are you breaking down categories? What are the categories
that still make money? Are still going concerns? Are still
businesses that you would look at and go, actually, I
can make this happen.

Speaker 2 (02:29):
The hospitality there is still I mean, well they're at
Hospitality is patchy, there's winners and losers out there. So
we're still twenty percent of our business self, so that
calls came from hospitality, So they're businesses that were making money.
On top of that, you've got childcare, age care, transport, logistics,
important distribution, healthcare, so all the usual categories. So it
wasn't it wasn't skewed in one particular way. It's sort

(02:51):
of the standard distribution we'd see by industry.

Speaker 1 (02:53):
And do you know when somebody comes along to buy
a business, you know, I say I got laid off
today and I thought, I know, I'm going to buy
myself a bit do I have any idea what I'm
buying do I am I an expert in the field,
or we wouldn't have a clue.

Speaker 2 (03:06):
Generally is a fair bit of education. He goes on,
especially for the what we call the corporate refugees, which
we've seen a lot more of now, which are people who,
as you refuge to before. There's plenty of people being
laid off and looking to replicate their income lab business,
ownship because the job market is so tight, especially at
the higher end. But it's the only way they can
actually make an income, so they're essentially buying themselves a job,
and they need a lot of education. They're coming and

(03:28):
going I don't really care what I do as long
as it makes me two hundred grand a year. But
then we mentioned to them, you know, do you want
to clean a kitchen or you know, look after young children.
They'll go no, no, no, So they do need some education.

Speaker 1 (03:40):
Very interesting insight, Chris, go, well, listen, I know you're
in Vietnam, and I know it's one thirty in the morning,
so I appreciate you staying up or getting up or
whatever you've done.

Speaker 2 (03:48):
Too easy. Thanks, Mike ge have a good day. Good
on you.

Speaker 1 (03:50):
Mate Chris Small, who is the ABC too easy? See?
I mean, come on for the all blacks who don't
like to come on the program a day before a test,
for the all blacks who don't like to come on
the program a day before the test. How come Chris
can get up at one point thirty in the morning
in Vietnam and so too easy? Mike? How come it's
too easy for Chris, but just a little bit difficult
for an all black. Not that I'm bothered by it.

(04:11):
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