Chris Small: ABC Business Sales Managing Director on the number of businesses reporting losses

More businesses are reporting losses but things may not be quite as bad as the numbers make it seem. 

Inland Revenue data shows one in five businesses aren't turning a profit. 

But ABC Business Sales Managing Director Chris Small says most of those are businesses structured to make a loss, like trusts and property companies. 

He told Mike Hosking the situation he's seeing is far more positive. 

Small says 90% of businesses that are coming to see him are making a profit, with others making a paper loss. 

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Episode Transcript

Speaker 1 (00:00):
More insight into the economy. You darted from MYRD shows
twenty percent of businesses operating at a loss. This is
in twenty twenty three. One hundred and seven thousand of
them can out of the four hundred and seventy five
thousand companies we have. By last year similar trend, another
one hundred and seven thousand companies still reporting losses, more
than forty percent of those businesses. By the way, in
accommodation and food, Chris Small, CEO at ABC Business Sales,

(00:20):
is back. Well this Chris, very good morning to you.

Speaker 2 (00:22):
Okay, Mike Keey, you're doing very well.

Speaker 1 (00:24):
Indeed, how many businesses run at a loss, will always
run at a loss? Are a bit useless and that's
just life.

Speaker 2 (00:29):
Yeah, great point. So within those numbers is actually a
high proportion they actually have no staff, and they actually
include things like trusts and property owning companies. So i'd
say you're rejected. What there's a fear proportion as you
look at prevous years ninety nine thousand that I've actually
structured in a serisan way, which will always for text
efficiency reasons show a loss. So I think you spot

(00:50):
on there is there.

Speaker 1 (00:51):
Are variation in sectors. I mean I highlighted accommodation and food.
Will some always struggle because of the number of people
in that sector.

Speaker 2 (01:00):
Not necessarily, I mean it's at the moment you exactly right, retail, accommodation,
and hospitality, which all have a reliant on customer demand
or consisumer spending. As we all know, we're in a
cost of living crisis, so consumers are spending less. So
in particular those those are the seat does it getting
hit the hardest. But no, there's no reason why those
sectors can't make money. Well, I would say is certain

(01:23):
sectors US have tax efficiency structures, so when they come
and see us. For example, it's often that certain sectors
are showing a loss from a tax perspective, but when
you beck out certain private costs or other costs that
are in there, they actually are showing a profit. So
there's a few complexities within.

Speaker 1 (01:38):
Those those losing money. How does that dovetail into sales
and demand for sales of businesses?

Speaker 2 (01:44):
Yeah, good, good question. So I did a bit of
analysis before before I came on. So at the moment,
still ninety percent of people who are coming to see
us are making a profit. So it's approximately one in
ten are showing a paper loss. It's the sort of
ratio we're seeing the wright, which which is a good side.
So we've still got what we're seeing. Ninety percent of
small and medium sized enterprises than New Zealand are still

(02:05):
making a profit when they come and see us and
want to put their business on the market.

Speaker 1 (02:08):
Good good insight. As always, Chris appreciated ABC Business Sales Boss.
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