With Grant Thornton's latest gobal business survey identifying that 69% of NZ businesses may be up for sale in the next 10 years two burning questions that will only become more apparent with time would have to be "Are there enough buyers? If so is there enough funding out there to actually make this happen?"
The vast majority of people have the dream of both financial and personal freedom when they go into business but very few actually realise the dream. In most cases all that ends up happening is people buy themselves a job they are tied to with more hours, greater responsibility and financial risk. There are many positives that outweigh the negatives however, especially for those that can gain the financial freedom - but do they have the time to enjoy it?
One of the most common themes I find when speaking business owners (even those that are very successful) is that while they may have a nice house and car and in many cases the boat and holiday home, they personally see it as an investment into their family to get the benefits from now and for their own personal benefit in the future when the business sells.
It would also be fair to say that most business owners are very passionate about what they do and although they like the idea of a big wad of cash one day when they decide to retire and sell up there is always the question of "What then?".
The glut of businesses potentially coming onto the market over the next 10 years will potentially lead to an increase in business owners stepping back from their businesses rather than selling up. Making a partial exit or developing systems processes and structures in their businesses to allow them to reduce their hours to a well deserved "semi-retired" status while still receiving substantial percentages of profits will become much more common and desireable. This is an option many owners don't readily think of and while it has huge benefits many will find hard to do without the right support and guidance. A well thought out plan needs to be impletmented to ensure the businesses will continue to be profitable and the right people need to be identified and groomed to take on more active and senior roles but it can be done and very succesfully.
The earlier a plan is developed the greater the likelyhood of success and it also will help mitigate the risk of the "hit by a bus" or "had a heart attack" scenario where a business owner may have to exit the business at short notice. No issue for the business owner if they ahve the appropriate insurances however it can lead to major issues for the business itself and staff that rely on it.
Where will this lead? I think in a very positive direction where smart business owners wanting to retain an interest in their business, focus more on a personal goal of company governance rather than hands on management and they will also invest more the growth and developement of their staff.
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